The Dutch tax climate

An important reason for foreign companies to choose the Netherlands as their base of European trade, stems from the supportive Dutch tax policy. The Dutch government has a solid record of stable industrial, educational and tax policies. The Netherlands has bilateral tax treaties with over 50 countries, including Canada, more than any other country. The statutory corporate income tax rate (34.5 percent in 2002) compares well within Europe and is the second most favorable in the Eurozone. Moreover, there are no taxes on outgoing royalties and interest, there is a tax exemption for expatriate employees (known as the 30 percent allowance), and the Netherlands abides by the General Accepted Accounting Principles.

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Tax rulings can be negotiated in advance providing certainty on taxable income and the effective corporate tax rate for the next four to eight years. The final, effective tax rates obtained are among the most competitive in the European market. A recent survey pointed out that the average corporate tax burden is 18.7 percent. Finally, if a Canadian company is looking to expand globally, the Netherlands’ tax system allows for an easy transition into trade with other members of the European Union. It is important to note that all of these features of the Dutch tax regime comply with accepted international standards as formulated by fora such as the Organisation for European Co-operation and Development (OECD). All said and done, the Dutch tax regime often results in a lowering of the costs of doing business in a global environment.

More information on the Dutch tax policy can be obtained from the website of our Ministry of Finance.