Doing business in the Netherlands

Doing business in the
Netherlands
Budapest, November 18. 2015
BAAT at a glance
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Mid sized firm of accountants and advisors
Since 1998
100 employees
3 offices in the Netherlands, 1 office in
Belgium
BAAT at a glance
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Accountancy
- Due Diligence expertise
- Business valuation
Tax advisory and - declarations
Pay roll
Legal
Audit (Q Concepts)
Trust services (domicile, director)
Multi lingual (English, French, German, and Chinese)
International praxis
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German and China desk
Cross boarder labour team
VAT team
Cooperation DBH Group
Setting up a business in the
Netherlands
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In general: simple procedure for EU residents
Registration of a company takes about 1 to 3 weeks
No declaration of non-objection required by Ministry
Bank account
Registration required at Chamber of Commerce and Tax Authorities (VAT,
Corporation tax, wage tax)
• IMPORTANT: fiscal substance (office, warehouse, etc.)
B.V. vs. branch
Most common:
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BV
Private limited liability company
1 or more shareholders, only registered shares
No minimum capital required (from € 1)
Incorporation by notary deed
Articles of incorporation (name, address, share capital, goals, director(s),
power of attorney, share holders meeting, fiscal year)
• Costs approximately € 2.000 (notary and advisor)
B.V. vs. branch
branch
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Not a separate legal entity
Establishment in Netherlands is part of foreign legal entity/parent company
Parent company bears full liability for the branch
Tax exemption for result branch in grant total result parent cy.
Discussion with Dutch and/or foreign tax authorities may arise about
attribution of p&l components
B.V. vs. branch
Aspects to consider:
- Foreign company is fully responsible for obligations and liabilities
(branch)
- limitation of liability up to share capital (BV)
- equal annual ‘running costs’ (accounts, VAT, corporate tax
declaration)
- public deposit of annual accounts (BV or parent company)
- commercial motive: doing business with ‘familiar ’Dutch BV instead
of foreign company
Baat generally recommends a B.V.
Ruling practice
General:
- Dutch tax authorities are easily accessible, pre filing meeting for
orientation is possible, also for smaller companies
- No dealing about tax rates!
- Front runner in number of modern tax treaties
Advance Pricing Agreement (APA):
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Conformation regarding transfer-pricing issues
Advance Tax Ruling (ATR):
Confirmation regarding tax consequences
Tax treaty NL-HUN
Article 5: permanent establishment/branch
A fixed place of business through which the business of an enterprise is
wholly or partly carried on (office, warehouse, factory, construction site >12
months)
Article 6: income from immovable property
Income derived by a resident of one of the states situated in the other state
may be taxed in that other state.
Tax treaty NL-HUN
Article 10: dividends
Dividend paid to Hungarian individual/tax payer: 15% withholding tax
Dividend paid to Hungarian parent company: no withholding tax (EU directive)
Article 11: interest
No Dutch withholding tax!
Article 12: royalties
No Dutch withholding tax!
Tax treaty NL-HUN
Starbucks Ikea Google etc. … European Commission criticizes
Dutch ruling praxis
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Are holdings mailbox companies?
A company in its starting up phase is not a mailbox company..
Fiscal substance is required:
office, staff, daily business..
Trust praxis is very important
Corporate income tax highlights
Rates in the Netherlands and neighbour countries:
Netherlands
€ 0 - € 200.000
€ 200.000 >
Belgium
Germany
20,00%
25,00%
33,99%
Körperschaftsteuer
Gewerbesteuer (average)
Total
15%
15%
30%
Corporate income tax highlights
Participation exemption:
Exemption from Dutch tax on all benefits connected with qualifying
participation
Losses related to qualifying subsidiaries are non-deductible
Requirements:
• Holding holds at least 5% of the subsidiary’s capital
• Participation not held as a portfolio investment , active business is required
(tax rate subsidiary >10%, )
• Please check every case is different!
Corporate income tax highlights
Fiscal unity
Parent company owns at least 95% shares of subsidiary, then joint application for
fiscal unity is possible
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All companies involved are effectively established in the Netherlands
Companies will be viewed as single entity for corporation tax
Losses of one company can be set off against the profits of another company
Intercompany transactions are non-existent for fiscal consequences
Corporate income tax highlights
Settlement of losses
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Carry back
1 year
Carry forward 9 years
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Within fiscal unity: horizontal settlement (within the same fiscal year) between
companies before vertical settlement (with other years)
Corporation income tax highlights
Research & Development facilities
Wage costs: (WBSO)
► reduction of wage tax on wages based upon hours spent on R&D
► NEW technology (products, processes, software etc.)
► reduction of payroll tax amounts to 35% of first € 250.000 wage costs and 14% of the
excess costs.
Innovation box: (I-Box)
Corporation tax rate of 5% (in stead of 20%!).
• WBSO or patent, and
• Self developed intangible asset (!)
• Only taxable profits (= turnover minus production costs!) derived from intangible assets can
be placed into the box
Corporation income tax highlights
I – Box: example
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€ 400.000 grant total profit in 2015
Turnover related to intangible asset € 150.000
Costs developing the intangible asset € 60.000
----> Corporation tax without I-Box:
(€ 200.000 x 20%) + (€ 200.000 x 25%) = € 90.000
----> Corporation tax with I-Box:
(€ 200.000 x 20%) + (€ 110.000 x 25%) + (€ 90.000 x 5%) = € 72.000
Fiscal aspects of labour
Wage tax rates 2015
€ 0 - € 19.822
€ 19.822 - € 33.589
€ 33.589 - € 57.585
€ 57.585 >
(*) 28,15% social security premiums, 8,35% taxes
(**) 28,15% social security premiums 13,85% taxes
36,50% (*)
42,00%(**)
42,00%
52,00%
Fiscal aspects of labour
30% ruling
Incentive to attract qualified staff to the Netherlands
Tax free reimbursement up to 30% of wage as deemed extra –
territorial costs
Requirements:
• Specific expertise that’s not available or is scarce on Dutch labour market
• Employee must have lived outside a 150 km radius of the Dutch border
• Application within 4 months of starting employment
• Maximum term 8 years
• Minimum taxable salary € 35.000 (total remuneration approx. € 50.000)
Fiscal aspects of labour
Without 30%
ruling
With 30%
ruling
With 30%
without ssp
Hungary
Paid by employer
€ 85.000
€ 85.000
€ 85.000
€ 85.000
Less: extra-territorial costs
Wage for income tax
€0
€ 85.000
€ 25.500
€ 59.500
€ 25.500
€ 59.500
€0
€ 85.000
Tax and premiums
Net income
€ 35.196
€ 49.804
€ 20.891
€ 64.108
€ 13.881(*)
€ 71.118
€ 28.475
€ 56.525
Premiums employer
€ 9.282
€ 9.282
€0
€ 24.225
Employers costs
€ 94.282
€ 94.282
€ 85.000
€ 109.225
Effective tax rate
41,40%
24,57%
16,30%
33,50%
(*) ssp to be paid in
resident state
Value added tax (VAT)
• Standard rate 21%, reduced rate 6%
(Germany: 19/7 Belgium: 21/6)
• Art. 23 deferral license: no VAT due on import from outside EU,
VAT liability is shifted to VAT declaration, and deductable -> no
VAT cash out!
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Regular procedure: customs and VAT to be paid at time of import, VAT to be deducted on
declaration
With deferral license: only customs due at time of import
Baat Trust Services
Services:
domiciliation for fiscal substance
providing of board / director (unless active
company)
• Maastricht address
• Thorough check on client before acceptance due to strict
regulations
Questions
Marcel Bollen
t: +31 43 20 50 401
@: [email protected]
Paul Thewissen
t: +31 475 350 909
@: [email protected]
28 juni 2012