Emerald Consult

The Netherlands

The Netherlands is a global outpost of freedom and is famous for its very friendly taxation conditions. As a result, the Netherlands has long been one of the most popular North European tax havens:

  • Good corporate tax rate: up to 200,000 Euros net profit – 20%; above 200,000 Euros net profit – 25%

  • Very attractive taxation regime for transactions related to capital movements: holding companies do not pay tax on dividends received from their subsidiaries, as well as capital gains tax on shares sales. Intellectual property royalties are also tax exempt – this feature attracted transnational IT business, which is now saving billions of dollars
  • A reliable banking system with a simple procedure for opening and closing accounts
  • 131 effective agreements on avoidance of double taxation and information exchange (including the Russian Federation) allow a reduction in the taxable base between participating Dutch and Russian entities

However, when examining the opportunities offered by The Netherlands, it is necessary to consider the recent attack of the Dutch government on possible tax cover-ups. Currently, it is only expressed through increasing control over Dutch international companies – a decree that took effect on January 1, 2014 on the requirements of considerable presence for the companies working in intra-group funding and licensing. This obliges holding entities to:

  • Provide residence status to at least half of its directors

  • Retain accounting records in the territory of the country
  • Have major bank account in the country
  • Have a registered address in The Netherlands and considerable own equity
  • Bear actual economic risks for completed transactions
  • Not be considered by the authorities of another country as its tax resident

Moreover, the financial system of The Netherlands and other European countries is very transparent: information on directors and shareholders is publicly available on the state register, all changes in shareholding structure are authorized by a notary, and the powers of attorney are issued only for specific assignments.

However, all of the above conditions do not make The Netherlands a less desirable jurisdiction in which to run a serious and responsible international business.

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