There are many reasons the Netherlands is a great place to live and work. Its strategic location as the gateway to Europe, world-class infrastructure, and innovative business-friendly environment are attracting companies from all over the world.
Welcome to our first Blue Clue blog and this exclusive interview with our Founder, Ton Krol.
In future blogs we’ll be covering the latest news and views on living, working and doing business in the Netherlands. We’d also love to hear your thoughts. If you have any topics, concerns or questions that you’d like us to cover in future blogs, please let us know.
Tax alert September 2017 – multinational companies
The Netherlands - 2018 Budget Proposals
On 19 September 2017 the Dutch Ministry of Finance published its tax budget proposals for 2018. One of the most important changes regards the reduction of the Dutch Dividend Withholding Tax (DWT) to nil for international business activities. Below we will explain these changes and we will address the remaining proposed changes relevant for multinational companies. We note that the proposed changes may be subject to some amendments. Voting in the Dutch Parliament is scheduled for 16 November 2017.
Will dividend withholding tax between Netherlands and Curaçao go down?
Netherlands and Curaçao have reached an agreement on the new rules on the avoidance of double taxation between the Netherlands and Curaçao. For Curaçao the exemption of dividend withholding tax is important. To prevent avoid abuse the shareholder on Curaçao will have to meet extra conditions.
Submit your refund request for VAT paid in other EU Member States
Have you paid VAT in other EU Member States than you can reclaim this by submitting a refund request prior to October 1st of the following year and if you meet the conditions. For a whole year the threshold is € 50 per EU Member State. You can submit refund requests during the year after each quarter, if the refund exceeds € 400.
Object against 16% employers crisis tax for 2012 salaries in access of € 150.000
In April 2013 a one-time employer levy of 16% is due on wages (including bonuses, benefit in kind, et cetera) that exceed € 150,000 in 2012. The levy is also applicable to employees who are shareholder of the employer as well. A recent court case gives ground to object successfully against this crisis levy.
16% employers levy for salaries in access of € 150.000
In the 2013 Budget Agreement a one-time employer levy of 16% is due on wages (including bonuses, benefit in kind, et cetera) that exceed € 150,000 in 2012. The levy is also applicable to employees who are shareholder of the employer as well.
Submit your refund request for VAT paid in other EU Member States
Have you paid VAT in other EU Member States in 2011 than you can reclaim this by submitting a refund request prior to October 1, 2012 and if you meet the conditions. For a whole year the threshold is € 50 per EU Member State. You can submit refund requests during the year after each quarter, if the refund exceeds € 400.
Research KPMG 2011: Netherlands has fourth highest personal income tax rate
Although the Netherlands is attractive for businesses, the top rate for personal income tax is the fourth highest in the world.
Report on corporate taxation of headquarter services in Europe
VU University Amsterdam published this report, which provides insights into the current tax treatment of group headquarter (HQ) services in the Netherlands, Ireland, the United Kingdom and Switzerland. The study focuses on the taxation of holding companies, financing and treasury companies, research and development activities and the exploitation of intellectual property.
Inter-company financing: non-deductible interest
Avoid that interest is not deductible by the debtor and is taxed at creditor. These are expensive loans. A recent decision made clear that repairing the loan terms retrospectively does not always work.
For complete text refer to the link.
The European Parliament yesterday adopted a resolution whereby the European Parliament urges the European Commission and EU member states to take measures against tax fraud and tax evasion.
For example the European Parliament wants Member States to change their tax treaties and the EU to change the Parent-Subsidiary Directive and the Interest and Royalty Directive!
For complete text refer to the link.
Netherlands tax treaty overview per 1 October 2011
The Netherlands has concluded tax treaties to avoid double taxation with numerous countries. The Netherlands has also concluded treaties to exchange tax information. This overview includes not only the tax treaties but also the other tax related treaties. The treaty overview is updated every quarter.
Dutch corporation tax plans in 2012 Budget, cooperatives under attack?
By mistake the 2012 Budget was published yesterday afternoon. The bill will go the parliament soon and enters into force at January 1, 2012. We will have to see how much of the current plan will be changed by the parliament.
The 2012 Budget introduces the following changes for the corporation and dividend tax:
1. limiting the interest deduction excessive holdings through the acquisition;
2. exemption for permanent establishments;
3. tax obligation of foundations and associations;
4. substantial interest in Dutch entities;
5. R & D deductions.
The unexpected change is about a substantial interest in Dutch entities. This includes the introduction of a dividend tax for memberships in cooperatives, which are (or as of today were?) used for one main purpose: to avoid the Dutch dividend withholding tax. Will this end the use of Dutch cooperative in international structures? Read more in section 4 and make up your mind.
Following media reports about the use of the 30% tax ruling and the public attention that was paid to the ruling, the Standing Committee on Finance requested more information.
State Secretary of Finance informed the House in letter 2011D31897 that he intends to improve 30% tax ruling this year on four points.
In the Netherlands X NV, a Dutch holding company owned an Australian company, A1 Ltd. NV X Ltd. has provided loans to A1 Ltd. The subsequent interest received was taxed in the Netherlands.
In 2004 X NV and A1 Ltd converted the loans into redeemable preference shares. The conditions are particularly as follows:
-the redeemable preference shares pay an annual, cumulative dividend of eight percent in the first two years;
-in subsequent years the dividend increases with one percent per every two years to a maximum of twelve percent;
-the redeemable preference shares have priority over common stock in payment of the dividend and the repayment of principal;
-the redeemable preference shares may be redeemed at any time and will have to be redeemed fully after ten years;
-the holders of the redeemable preference shares have no voting rights except in case of termination of the business or with respect to decisions that affect the rights of redeemable preference shares itself.
In the Netherlands the fiscal agenda indicates to introduce (again) a restriction for Dutch holding companies to tax deduct interest paid on loans used to finance or acquire participations. A threshold of € 500.000 might be applicable for small acquisitions. Goodwill paid on shares currently triggers Dutch thincap rules in case you want to form a fiscal unity. It seems they want to change this by counting goodwill paid on shares as equity for the thincap rules. Mid June the Dutch State Secretary of Finance will publish a report on loans used to finance/acquire participations. This report will be used to propose new legislation on this subject.
State Secretary of Finance Frans Weekers announced to amend the Dutch participation exemption
In the Netherlands under current law and jurisprudence the participation exemption is applicable to foreign exchange losses on participations. Foreign exchange gains and losses are therefore tax exempt respectively not tax deductible.
Based on the decision of the European Court of Justice on the Deutsche Shell a number of international companies is of the opinion that foreign exchange losses are tax deductible. If they are right, this has a significant impact on the budget.
LEGAL RIGHTS OF TAXPAYER: ONE STEP FORWARD AND TWO BACK?
Case: informant now public
In the Netherlands the Arnhem Court ruled that if a tax penalty has been imposed, all relevant documents relating to the case have to be given to the tax payer by the tax authorities, including exculpatory information and documents. Taxpayers have a fundamental right timely and complete information.
These include documents relating to:
(-) Whether there is a project and, if so, documents relating to the project;
(-) Documents relating to the examination (reliability) of the informant, the informant and the agreement which the State has concluded with the informant;
(-) Documents relating to the calculation of the additional assessments;
(-) Other documents relating to the affairs of the tax payer, and;
(-) A list of documents relevant to the case, which are (partially) kept secret for serious reasons, along with the reason why.
A Dutch entrepreneur delivered goods to a French customer who came to collect the goods himself. The Dutch entrepreneur charged the 0% VAT rate.
The Dutch entrepreneur claims the goods were delivered and transported to the French entrepreneur.
For these supplies the Dutch entrepreneur administrated pro-forma invoices, CMR's completed by himself and also initialized for receipt by himself. In 2010, the invoices and copies of the CMR's were signed by the French entrepreneur.
X BV is an investment company (i.e. a cashbox). Until late 2001, the investment company resided in the Netherlands and then the shareholder, who lived in the Netherlands, moved the seat of the investment company to Curaçao and appointed a trust company as board of the investment company.
The facts show that the Dutch shareholder negotiated the asset management agreement with a private bank and that the trust company needed approval of the shareholder for all most everything that had to do with the asset management.
At stake was where the actual management and control of the investment company was: in the Netherlands and Curaçao.
Within the group company A transfers real estate to company B against a receivable. By using a fiscal unity (group taxation rules) the group did not to have to pay tax on the capital gain.
Later company A moves to Aruba, where it does not have to pay any tax.