Tax on Corporations


Corporate income tax is levied on income and capital gains at a maximum rate of 25% for more than €245,000 in taxable income. A reduced rate of 15% applies to taxable income up to €200,000. There are no provincial or municipal taxes on income.


The following entities are subject to Dutch corporate income tax:

  • public companies with limited liability (naamloze vennootschap),
  • private companies with limited liability (besloten vennootschap),
  • open limited partnerships (open cv);
  • cooperatives and other associations established on a cooperative basis;
  • mutual insurance companies and other associations that act as insurance or credit organisa­tions on a mutual basis;
  • associations with or without legal personality, foundations as well as entities governed by public law, if and to the extent that they con­duct a business; and
  • mutual funds.

Companies incorporated under Dutch law are deemed to be residents of the Netherlands (pursuant to the so-called the “incor­poration theory”). This fiction applies to most corporate income tax provisions and for dividend withholding tax as well as interest and royalty withholding tax purposes (we refer to section 10 below).

Should such company also be regarded as a resident of another jurisdiction and should a tax treaty be applicable, then the company’s place of residence will be determined on the basis of all applicable facts and circumstances on a case-by-case basis. This also applies to companies not incorporated under Dutch law.


A Dutch tax resident company is taxed on its worldwide income. A non-resident company is subject to Dutch corporate income tax only in respect of Dutch source income (e.g. income derived trough a Dutch permanent establishment or permanent representative as well as immovable property and natural resources located in the Netherlands). These taxing rights may be, however, limited under an applicable bilateral tax treaty.

Profits and losses attributable to a foreign permanent establishment or representative, are excluded from the company’s Dutch corporate income tax base. Any overall tax losses realised during the existence of the permanent establishment may be taken into account in the Netherlands at its termination (stakingsverlies), but only to the extent that:

  • these losses cannot be offset against any other (future) foreign income in the country in which the permanent establishment was located; and
  • the business of the permanent establishment is not continued by a party related to the Dutch company.

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Capital gains are taxed at the same maximum rate as ordinary income (a maximum rate of 25% applies). Capital gains realised on the disposal of shares in a qualifying participation are exempt on the basis of the participation exemption.


In principle, all expenses incurred in a company’s ordinary course of business (including interest expenses) are deductible for tax purposes. However, this does not apply to (deemed) dividend distributions, fines and penalties.


The deductibility of interest expenses is subject to strict anti-abuse legislation mainly applicable in case of loans from related parties. Currently the following interest deduction limitation rules should be observed by taxpayers.

  1. Requalification of debt
    If a provision of funds qualifies as a loan pursuant to Dutch civil law, then Dutch tax law in principle follows that qualification. Nevertheless, it allows for a requalification if the funds in fact serve as capital (equity) to the taxpayer. As a result any payments of interest made by the taxpayer are non-deductible.
  2. Anti-base erosion rules
    Interest that is directly or indirectly owed to a related party – which generally requires a one-third interest – is non-deductible to the extent that the loans obtained by the taxpayer from that related party are used for the following transactions:

    1. profit distributions or capital repayments by the taxpayer or a related company, which is subject to Dutch corporate income tax, to a related company or related individual;
    2. capital contributions by a taxpayer, a related company which is subject to Dutch corporate income tax or a related Dutch resident individual, into a related company; or
    3. an acquisition or expansion of an interest by a taxpayer, a related company which is subject to Dutch corporate income tax or a related Dutch resident individual, in a company which after the acquisition or expansion qualifies as a related company.
    4. Subject to certain conditions, the anti-abuse rule should not apply if the taxpayer is able to demonstrate that:
      1. both the loan and transaction are based on sound business motives; or
      2. the interest is sufficiently taxed in the hands of the recipient (according to Dutch standards) and the interest is not set-off against any loss carry forward.
  3. Earnings stripping rule
    Pursuant to the generic earnings stripping rule, any excess interest expenses (being the net balance of interest costs and income, including foreign exchange results on loans) are only deductible up to the higher amount of:

      1. €1,000,000 or
      2. 30% of the adjusted Dutch taxable profit (the EBITDA for tax purposes).

If a fiscal unity is formed between taxpayers (we refer to section 9.7 below), the rule should be applied on a fiscal unity level. Should part of the interest be non-deductible pursuant to the earnings stripping rule in a fiscal year, then such non-deductible part may be carried forward indefinitely and be set off against future profits (subject to the aforementioned thresholds and restrictions in abusive situations).


In principle, inventories are valued at the lower of either cost or market value. However, if certain conditions are fulfilled, the last-in first-out (LIFO) and the base-stock methods of valuation are acceptable.


In principle, any system of depreciation may apply if and to the extent that the system is in ac­cordance with “sound business practice” (goed koopmansgebruik) and that this system is consist­ently applied.

Depreciation may only take place until the tax book value of the real estate has reached 100% of the value as determined pursuant to the Valuation of Immovable Property Act (Wet waardering onroerende zaken), the so-called WOZ-value. Until 2019, it was possible to depreciate real estate to a tax book value of 50% of the WOZ-value if the real estate was used by the owner. A transition rule has been provided for Dutch real estate that has been taken into use by the company less than 3 years prior to 1 January 2019. Land may not be depreciated. However, land held in leasehold may be depreciated over the remaining term of the ground lease unless the ground lease is perpetual. If the ground lease is perpetual, no depreciation is possible.

Depreciation of purchased goodwill is limited to a maximum charge of 10% per annum. The general depreciation of all other assets (cars, computers, etc.) is limited to a maximum charge of 20% per annum.


Tax losses realised by a company in a given year can, in principle, be carried back and offset against profits of the preceding year and can be carried forward for six years.

In the event of a significant change in ownership of the shares in the company, the utilization of existing tax losses may be restricted going forward to prohibit the trade in companies with (substantial) tax losses.

As of 1 January 2022 tax losses can be carried forward without any time limitations. However, under the new rules tax losses can only be offset against 50% of any profits in excess of €1,000,000. Tax losses can still be offset fully against profits up to an amount of €1,000,000.


The following tax incentives may be available for taxpayers:

  • innovation box regime;
  • new R&D cost-related deduction;
  • discretionary depreciation;
  • general investment deduction;
  • energy investment deduction; and
  • environmental investment deduction.

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In order to facilitate and stimulate innovation, a special tax regime applies in respect of profits that are realized by a taxpayer through the development of an intangible fixed asset. These intangible assets need to be the outcome of certain qualifying Research and Development (R&D) activities conducted by the taxpayer and for which a special R&D declaration (S&O verklaring) is issued by the Dutch tax authorities. Additional requirements apply to taxpayers that:

  • have derived benefits from such assets to a total amount of at least €37,500,000 in the relevant financial year and the four years preceding that year combined; or
  • have a global net turnover of at least €250,000,000 in the relevant financial year and the four years preceding that year combined.

These additional requirements may for example include obtaining a patent, authorization or certificate. Any profits derived from these qualifying assets are subject to an effective corporate income tax rate of 9%.


The R&D facility (WBSO) provides for deduction of R&D costs, to be deducted in the wage tax return. There are two tax brackets of which the first one is 24% for investments up to €350,000; and the second bracket is a percentage of 16%.


On request, an investment deduction (kleinschaligheids investeringsaftrek or KIA) is granted for small-scale investments in certain assets. The deduction is available if the total of all investments in a calendar year is between €2,401 and €328,721.


An energy investment deduction (energie investeringsaftrek or EIA) may, on request, be granted for new investments that contribute to energy efficiency. The deduction is available if the total of all qualifying investments in a calendar year exceeds €2,500. The energy invest­ment deduction equates to 45.5% of the total amount of energy investments in a calendar year. The maximum deduction is reached if the qualifying investments amount to a total of €126 million.


An environmental investment deduction (milieu investeringsaftrek or MIA) may, on request, be granted for investments that contribute to the protection of the environment in the Netherlands. The deduction is available if the sum of all qualifying investments in a calendar year exceeds €2,500. The environmental investment deduction is computed as a percentage of the cost price of each qualifying investment. The percentages vary from 13.5% to 36%.


A discretionary deduction on environmental investment (willekeurige afschrijving milieu investeringen or VAMIL) may, on request, be granted for investments that contribute to the protection of the environment in the Netherlands. The deduction is 75% of the investment and is often combined with the MIA.


The participation exemption regime prevents economic double taxation by exempting dividends received by Dutch corporate taxpayers from a qualifying subsidiary and capital gains realized on the sale of an interest (e.g. shares) in such qualifying subsidiary from Dutch corporate income tax. Losses (including foreign exchange losses) incurred on the disposal of an interest in a qualifying shareholding are also non-deductible. An exception is provided for liquidation losses (liquidatieverlies), which can be deducted under certain circumstances. Additionally, costs relating to the acquisition or sale of a qualifying interest may fall within the scope of the regime and may therefore be non-deductible.

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In order to be entitled to the participation exemption the interest held by the corporate taxpayer should be a qualifying interest, which is generally the case if the following conditions are met:

  • the taxpayer owns at least 5% in the nominal paid-up share capital of its subsidiary. Alternatively the condition may also be satisfied if the corporate taxpayer owns at least 5% of the circulated certificates in a mutual fund, that taxpayer (in the capacity of limited partner) is entitled to 5% of an open partnership’s profits, or if the corporate taxpayer is a member of a cooperative;
  • the interest in the subsidiary is not held as portfolio investment (portfolio investment subsidiary, or in Dutch: beleggingsdeelneming), unless it concerns a qualifying portfolio investment subsidiary (kwalificerende beleggingsdeelneming).

A subsidiary is considered to be held as portfolio investment if the subsidiary is held with the aim to receive a return which can reasonably be expected from normal asset management. This is a factual test. The participation exemption should in principle apply if the taxpayer is a top holding or intermediate holding company and the taxpayer has certain interference as to the policy making, financial and/or managerial control of its subsidiary or in the event that the activities of the subsidiary are in line with the activities of the group as such. Whether or not a subsidiary is held as a portfolio investment is to be considered from the taxpayer’s perspective.

Furthermore, a subsidiary is deemed to be held as a portfolio investment if:

  • the assets of the subsidiary – on a consolidated basis – consist for more than 50% of minor interests (i.e. shareholdings of less than 5%) in other subsidiaries; or
  • the subsidiary qualifies as a group financing subsidiary. A group financing subsidiary is assumed (unless an exception applies) if it, together with its substantial subsidiaries (i.e. shareholdings of 5% or more), is for more than 50% involved in granting loans to the taxpayer or related entities.

Despite being a portfolio investment, the participation exemption could still apply if the subsidiary qualifies as a qualifying portfolio investment. This is generally the case if one of the following conditions is met:

  • the subsidiary is subject to a reasonable tax on its profits, determined in accordance with Dutch standards. This is generally the case if the subsidiary is subject to an effective tax rate of at least 10%;
  • the assets of the portfolio investment subsidiary consist, directly or indirectly, of less than 50% of low-taxed free portfolio investments. Free portfolio investments are for example assets that are not required in the ordinary course of the subsidiary’s business, assets that are used for group financing or assets that are made available to related parties. Real estate is not considered a free portfolio investment.

The participation exemption does not apply to payments that are deductible at the level of the entity making the payment. This mechanism aims to neutralize the effective of hybrid financial instrument mismatches.


Dutch tax law provides for a group tax consolidation regime whereby taxpayers that are resident in the Netherlands, or have a permanent establishment in the Netherlands to which the shares in a Dutch resident company can be allocated, can form a fiscal unity (fiscale eenheid). Companies included in a fiscal unity are allowed to file a single (consolidated) corporate income tax return. Intercompany transactions are generally ignored for corporate income tax purposes to the extent that they are entered into between members of the fiscal unity (please note that exceptions may apply). Additionally, the transfer of assets within the fiscal unity is, in principle, not treated as a taxable event. As a result, any hidden reserves (including goodwill) are not taxed. Furthermore, losses of one member of the fiscal unity can be offset against profits of other fiscal unity members.

Dutch subsidiaries that are held by a Dutch parent company through a qualifying EU or European Economic Area (“EEA“) subsidiary can also be included in the fiscal unity. In addition, Dutch sister companies with a joint EU or EEA parent company that satisfies the aforementioned requirements, can also form a fiscal unity. Due to EU case law (Groupe Steria case), new rules have been introduced. As a result thereof, certain anti-abuse provisions that applied to non-resident taxpayers and their Dutch resident subsidiaries will now also apply to fiscal unities on a standalone basis for the subsidiaries that they include.

The Dutch legislator is currently working on a proposal for a new group system that is sustainable (and in line with EU law) for the future. Details have not yet been disclosed.


A CFC-regime has been introduced as of 1 January 2019, where certain non-distributed income from a low-taxed foreign subsidiary – in which the taxpayer directly or indirectly owns more than 50% of the shares – or a low-taxed permanent establishment is included in the taxable income of the Dutch corporate taxpayer. The CFC rules aim to combat tax evasion through the use of low-tax jurisdictions.

An entity or permanent establishment is considered to be low-taxed if it is:

  • tax resident in a jurisdiction with a statutory corporate income tax rate of less than 9%; or
  • tax resident of a jurisdiction included in the EU-blacklist of non-cooperative jurisdictions.

In case a CFC is deemed present, certain non-distributed income is included in the taxable income of the Dutch corporate taxpayer. CFC income is defined as:

  • interest income or other benefits from financial assets;
  • royalties or other benefits from intellectual property;
  • dividends and capital gains upon the alienation of shares;
  • benefits from financial leasing;
  • benefits from insurance, banking and other financial activities;
  • benefits from certain, low value adding, factoring activities.

Any related expenses may be deducted. CFC-income should only be taken into account to the extent that the balance of benefits (i.e. income less expenses) is a positive amount and to the extent that this balance, by the end of the financial year, has not been distributed by the CFC.

An exception to the CFC rules is available in case the listed items of passive income derived by the subsidiary make up less than 30% of the total income or in case the subsidiary carries out substantial economic activities in its country of establishment.


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Sylvia Dikmans
Partner Tax



Jeroen van Mourik
Partner Tax



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Last updated September 2021