Anti-Tax Avoidance Measures in the Netherlands: What Foreign Entrepreneurs Must Know
anti-tax-avoidance-measures-in-the-netherlands-what-foreign-entrepreneurs-must-know
Anti-Tax Avoidance Measures in the Netherlands: What Foreign Entrepreneurs Must Know
Tamm Solutions supports international entrepreneurs who want to establish or expand their company in the Netherlands. Whether you are scaling an existing business or launching a new venture, the Netherlands offers one of the most attractive environments in Europe: a stable economy, strong international reputation, and direct access to the EU Single Market.
We specialize in forming Dutch companies for foreign owners, guiding you through each step of the incorporation process. With the right documents, your business can be established within just a few working days. If you need personal guidance or want to understand how Dutch tax regulations apply to your situation, our team is always ready to assist.
Why Foreign-Owned Companies Pay Taxes in the Netherlands
To understand Dutch anti-tax-avoidance rules, it’s important to first understand why foreign-owned businesses are taxed in the Netherlands at all. Dutch tax obligations arise from several key principles:
1. Territorial Taxation
The Netherlands taxes income that is generated within its borders. This applies when a company has:
a Dutch-incorporated entity (such as a BV)
a Dutch branch or registration as a foreign company doing business locally
a permanent establishment, for example an office, warehouse, local employees, or a dependent agent
Any profits attributable to Dutch activities fall under Dutch corporate income tax.
2. Economic Contribution & Fair Competition
Taxes fund the essential public infrastructure that all businesses rely on, including:
roads, ports, and airports
education and healthcare
legal protection and enforcement
Foreign-owned and Dutch-owned companies are treated equally under Dutch law to ensure a fair, competitive, and transparent business environment.
3. Compliance with EU & International Standards
The Netherlands follows:
EU Anti-Tax Avoidance Directives (ATAD I and ATAD II)
OECD BEPS guidelines to prevent artificial profit shifting
A broad network of tax treaties that eliminate or reduce double taxation
These frameworks ensure that foreign-owned companies operating in the Netherlands are taxed fairly and are protected from being taxed twice on the same income.
4. VAT Obligations
Companies that sell goods or services in the Netherlands may be required to register for VAT, depending on the nature of their activities.
A Dutch-incorporated BV generally must register for VAT, while foreign companies need a VAT registration when they carry out taxable supplies in the Netherlands—such as storing goods locally, hiring staff, or exceeding EU distance-sales thresholds.
VAT ensures that every business participating in the Dutch economy contributes proportionally through the consumption tax system.
5. Which Taxes Apply to Dutch Companies?
The taxes your company pays depend on its legal structure, activities, and whether you hire staff. The most common taxes are:
a) Corporate Income Tax (CIT)
CIT applies to profits earned in the Netherlands.
2025 rates:
9% on profits up to €200,000
25.8% on profits above €200,000
Innovative businesses may benefit from significantly reduced effective rates under the Innovation Box regime.
b) Value-Added Tax (VAT / BTW)
Standard VAT rates in the Netherlands are:
21% (standard rate)
9% (reduced rate for food, books, and essentials)
0% on exports and intra-EU supplies of goods to VAT-registered businesses
VAT-registered companies must:
register for VAT
file periodic VAT returns
comply with EU VAT rules (including OSS/MOSS where applicable)
c) Wage Tax & Social Contributions
If your company hires employees in the Netherlands, you must:
withhold wage tax from salaries
pay employer social security contributions
Projected 2025 wage tax brackets:
35.82% up to €38,441
37.48% from €38,441 to €76,817
49.50% above €76,817
Employer social contributions typically total approximately 20–25% of gross salary.
d) Dividend Withholding Tax (DWT)
The standard Dutch dividend withholding tax rate is 15%.
This may be reduced or eliminated under:
the EU Parent-Subsidiary Directive
tax treaties with partner countries
Dividends and capital gains received from qualifying subsidiaries are generally exempt from Dutch CIT under the participation exemption.
e) Real Estate Transfer Tax (RETT)
This tax applies only when your company purchases Dutch real estate:
10.4% standard rate
2% for owner-occupied residential properties
Several specific exemptions may apply depending on the transaction
How Tax Avoidance Measures Are Created
Tax avoidance uses gaps or mismatches in tax laws to reduce tax burdens in ways that may be legal but considered aggressive.
To ensure fairness and alignment with international standards, the Netherlands implements strong anti-avoidance rules.
Dutch policy development is shaped by:
EU Anti-Tax Avoidance Directives (ATAD I & ATAD II)
OECD BEPS framework, targeting artificial profit shifting
National legislation, parliamentary debates, and court rulings
How these rules are created:
International obligations → EU and OECD rules must be implemented into Dutch law
National lawmaking process → Drafting → consultation → debate → approval
Continuous updates → Closing loopholes and adjusting to case law and new business practices
Key Anti-Tax Avoidance Measures in the Netherlands
Below are the most important anti-avoidance rules currently in effect.
1. Earnings Stripping Rule
Limits interest deductions to prevent artificial debt loading.
Companies may deduct:
Up to 30% of EBITDA, or
€1 million of net interest (whichever is higher)
2. Controlled Foreign Company (CFC) Rules
Applies when:
A Dutch taxpayer owns more than 50% of a foreign subsidiary, and
The subsidiary is located in a low-tax jurisdiction (statutory tax rate below 9% or on the Dutch low-tax list)
For such subsidiaries, passive income (interest, royalties, dividends, leasing income) becomes taxable in the Netherlands.
3. Exit Taxation
If a company transfers assets, functions, or intellectual property outside the Netherlands, it must pay tax on unrealized capital gains.
This ensures value created in the Netherlands is taxed before relocating.
4. Hybrid Mismatch Rules
Based on ATAD II, these rules prevent companies from exploiting differences in how countries classify entities or instruments to:
Deduct the same payment twice
Deduct a payment in one country without taxation in the other
This neutralizes advantages from hybrid entities, hybrid instruments, imported mismatches, and dual-resident structures.
5. Substance Requirements
The Netherlands aims to prevent companies from using Dutch entities purely as “letterbox companies.”
While fixed thresholds (such as €100,000 salary) are no longer used as universal criteria, companies must still demonstrate genuine economic presence, such as:
A Dutch office or operational address
Local employees or outsourced operational functions
Active decision-making occurring in the Netherlands
Properly documented board meetings and governance
The focus is on real business activity, not meeting a specific salary threshold.
6. Mandatory Disclosure (DAC6)
Under DAC6, tax advisors, intermediaries, and—if no advisor is involved—the taxpayers themselves must report certain cross-border arrangements that indicate potential tax avoidance.
This creates transparency and gives tax authorities early insight into structures that may pose compliance risks.
7. Withholding Tax on Interest & Royalties
Since 2021, the Netherlands applies a conditional withholding tax of 25.8% on interest and royalty payments to:
low-tax jurisdictions (statutory tax rate below 9%), or
jurisdictions on the Dutch blacklist, or
abusive situations designed to avoid Dutch taxation
Since 2024, this regime also applies to dividend payments to these jurisdictions.
The rule prevents profit shifting through inflated interest, royalty, or dividend flows.
8. Pillar Two – 15% Global Minimum Tax
Under the OECD Pillar Two rules, implemented in the EU, multinational groups with €750+ million in annual revenue must pay a minimum effective tax rate of 15% in every jurisdiction where they operate.
This ensures large groups cannot shift profits to low-tax countries to reduce their global tax burden.
How Tamm Solutions Establishes Your Dutch Company
Our streamlined process allows you to establish a Dutch company within just a few business days.
We typically require:
Names and identification of all shareholders
Preferred company name
Dutch business address
Basic structure and UBO information
Most international founders choose a Dutch BV, the equivalent of a private limited company.
Once the documents are verified, we coordinate the notary appointment.
Using a power of attorney, the entire incorporation can be completed remotely, without traveling to the Netherlands.
After incorporation:
You deposit the share capital
We register the company with the Chamber of Commerce
You receive your KVK number immediately
VAT registration follows separately (typically within 1–4 weeks)
Optional: We assist with opening a Dutch business bank account
Your BV can begin operating after incorporation, although VAT registration and banking may be required depending on your activities.
Our Services
Tamm Solutions provides full-service support for foreign entrepreneurs:
Dutch company formation
VAT and EORI registration
Permit and license coordination
Startup and expansion advisory
Administrative and secretarial support
Accounting and tax filing assistance
Legal and compliance guidance
General business consulting
We continuously refine our processes to deliver the highest level of service.
Tamm Solutions – Your Trusted Partner for Dutch Company Formation
If you want to understand Dutch tax requirements or establish a company in the Netherlands, our team is ready to support you.
We assist with one-time incorporations as well as ongoing tax, compliance, and administrative services.
Request a free consultation anytime.