Corporation tax in Netherlands is imposed on the taxable profit of companies and associations. One of the significant characteristics of Corporation Tax in Netherlands is participation exemptions. A company does not need to pay corporation tax, if it receives dividends.
Taxpaying Establishments
Any company that runs it's business operation in Netherlands, needs to pay corporation tax. A company will be treated as a resident taxpayer company, if it is established in Netherlands. A company will be treated as a non-resident taxpayer company, if it is not established in Netherlands but earning income from Netherlands. All the companies, cooperatives, enterprises and commercial undertakings in Netherlands, need to pay Corporation Tax.
Assessment Basis
The Corporation Tax is assessed on the basis of taxable profits and the taxable profits are assessed on the basis of personal income tax.
Tax Exemptions
Any charitable or social activities that are executed for public interest are exempted from corporation tax. The participation exemptions are applicable to all dividends that are related to holding of not less than 5% of the shares in a subsidiary.
Fiscal Unity
Any company in Netherlands, holding 100% of the shares in a Netherlands subsidiary is eligible to be qualified for a "fiscal unity". It is also possible for a fiscal unity to be comprised of two or more companies.
Collection
The collection of corporation tax is carried out on the basis of the declaration given by the taxpayer. In the event, if no such declaration is submitted by the taxpayer, then the tax department will directly asses the due amount.
Rate of Corporation Tax in Netherlands
In the year 2005:
- For the first € 22,689: 27%
- Rest: 31%
In the year 2006:
- For the first € 22,689: 25.5%
- Rest: 29.6%
In the year 2007: Estimated Corporation Tax Rate in Netherlands
- For the first € 41,000: 20%
- Rest: 26.9%