The attractive Netherlands tax climate

The supportive Dutch tax climate has a number of features that companies find extremely beneficial in international tax planning when competing in Europe.

• A Wide Tax Treaty Network: Aimed to avoid double taxation on income and capital.
• The Advance Tax Ruling Practice: This covenant between Dutch tax authorities and the taxpayer, allows companies to obtain a pre-determined tax ruling regarding what will be taxed.
• The Participation Exemption: All benefits related to a qualifying shareholding are exempt from Dutch corporate income tax.
• Tax Break for Expatriates: The Netherlands allows  specific employees a tax-free reimbursement of 30% of the employee's salary.
• Lowered Corporate Tax Rate: Corporate income tax may be avoided if the activities in the Netherlands do not constitute a permanent establishment or permanent representative.
• Withholding Tax: The Netherlands assesses no withholding tax on outgoing inter est and royalty payments.

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Strengthening of tax regime in 2011

The Netherlands continues to strengthen its tax regime in 2011. Below you will find the most important changes for businesses:

• Reduction of corporate income tax rate to 25%
• Extension of carry back period from one to three years
• Extension of accelerated and random depreciation of up to 50%
• Further improvements to the innovation box
• Filing VAT-returns on quarterly basis now possible
• Tax treaty network extended and renewed

Full details can be found in the extract of the Year End Tax Bulletin 2010 from Loyens & Loeff focusing on the Netherlands.