The Kingdom of the Netherlands is a parliamentary democracy headed by a constitutional monarch following the common law system. The Kingdom comprises a Caribbean part (the Lesser Antilles islands of Aruba, Curacao, and St. Maarten) and the continental European country of the Netherlands (proper) located in Northwest Europe, which is bordered by the North Sea to the north and west, Belgium to the south, and Germany to the east. The countries that form the Caribbean part of the Kingdom, have their own tax systems. The country of the Netherlands is divided into 12 provinces found on the continent and three special municipalities in the Caribbean. The latter, Bonaire, Saint Eustatius, and Saba, fall under a separate tax regime, which is not discussed here.
Amsterdam serves as the Dutch capital, whereas The Hague is the governmental and parliamentary seat. The official language of the Netherlands is Dutch, and the currency is the euro (EUR). The Netherlands was a founding member of the European Economic Community (EEC) which later developed into the European Union (EU). The Netherlands also participated in the introduction of the euro in 1999. The Netherlands is also a founding member of the North Atlantic Treaty Organisation (NATO) and the Organisation for Economic Co-operation and Development (OECD) (1957).
Throughout its organised inhabited history, the Netherlands and its people have been on the crossroads of differing influences. Around the turn of the first millennium of the Common Era, Germanic tribes bordered the Roman civilisation along the Rhine river. During the Middle Ages, semi-independent city-states faced federated centralisation efforts of larger empires, eventually consolidating the greater Benelux area in the loosely connected yet rather decentralised cooperation of the Seventeen Provinces. Canonal and commercial conflicts of interest led to the Dutch Revolt, with the most northern of the Seventeen Provinces declaring independence from Spanish rule in 1579.
During the 17th century, they became a leading seafaring and commercial power, with settlements and colonies around the globe. After a 20-year French occupation during the early Modern Age, a Kingdom of the Netherlands was formed in 1815 as a formalised successor state to the Seventeen Provinces. Being officially neutral during the First World War, the Netherlands suffered a five-year long occupation by the Nazis during the Second World War.
The many foreign influences, some voluntary, some forcibly, are still visible to this very day, even in the legal and tax system. The Romans introduced property taxes, the city-states left their tariffs, the French designed the civil code, and the Nazis introduced the corporate income tax. Nowadays, some parts of Dutch tax law originate from EU legislation adopted in Brussels.
The Dutch economy is noted for stable industrial relations, moderate unemployment and inflation, a sizable current account surplus, and plays an important role as a European transportation hub. A modern, professional services-oriented nation, the Netherlands is also a large exporter of agricultural products. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanised agricultural sector employs only 2% of the labour force but provides large surpluses for the food-processing industry and for exports.
The long-lasting history of commerce results in a government ambition of attracting foreign direct investments through tax incentives, such as the participation exemption, innovation box regime, and over 90 tax treaties with foreign nations. As part of the Rhineland influence area, a stronger-than-Anglo Saxon emphasis is placed on the social welfare state. Under the common law system, legislation generally prevails over jurisprudence. The judicial system serves as a stopgap of the legislative and executive branches of government.
The Caribbean part of the Netherlands (i.e. the islands of Bonaire, Saint Eustatius, and Saba) maintains a tax regime that is slightly different from that of the country of the Netherlands (in Europe). Inter-Kingdom tax matters are regulated through a so-called 'Belastingregeling', for instance between the country of the Netherlands and Aruba.
PwC is a leading professional service organisation in the Netherlands, with over 4,800 employees working to build trust in society and solve important problems.
PwC sees taxation as an integral component of ESG. PwC has the ambition to contribute, possibly together with knowledge partners, to a future-proof economy with an appropriate tax system. A sustainable approach to taxation is a precondition for this. Tax reform starts with social issues such as tackling climate change and income inequality. PwC has therefore supported the proposals of the independent think tank The Ex’tax Project for shifting taxes on labour to the use of raw materials and ancillary materials and towards consumption. We are seeing a clear shift in business from a focus on shareholder value to broader stakeholder value. That translates into new tax strategies. Entrepreneurs are aware of their social role.
The reform of the tax system offers the Netherlands opportunities. Shifting the burden from labour to pollution and use makes it possible to reduce CO2 emissions and reduce resource use. This is important for the competitiveness of our economy. The Netherlands is internationally regarded as a front runner in circular entrepreneurship.
|Corporate income tax (CIT) rates|
|Headline CIT rate (%)||
|Corporate income tax (CIT) due dates|
|CIT return due date||
Generally five months after the end of the company’s fiscal year.
|CIT final payment due date||
Tax is due within six weeks of the date of the assessment.
|CIT estimated payment due dates||
In principle, within six weeks, but the taxpayer may choose to pay in monthly instalments.
|Personal income tax (PIT) rates|
|Headline PIT rate (%)||
|Personal income tax (PIT) due dates|
|PIT return due date||
|PIT final payment due date||
The PIT payment is due within six weeks after the date of the assessment notice.
|PIT estimated payment due dates||
Estimated income tax payments are due in terms of payments of one month in case of a provisional tax assessment that is issued in the year to which the tax assessment relates.
|Value-added tax (VAT) rates|
|Standard VAT rate (%)||
|Withholding tax (WHT) rates|
|WHT rates (%) (Dividends/Interest/Royalties)||
Resident: 15 / 0* / 0*;
Non-resident: 15 / 0* / 0*
*As of 1 January 2021, there is a conditional WHT on interest and royalties (please see the Withholding taxes section).
|Capital gains tax (CGT) rates|
|Headline corporate capital gains tax rate (%)||
Capital gains are subject to the normal CIT rate (25.8%). Capital gains on qualifying participations are tax exempt under the participation exemption.
|Headline individual capital gains tax rate (%)||
|Net wealth/worth tax rates|
|Headline net wealth/worth tax rate (%)||
The Netherlands have no tax on wealth, but they do have a tax on a fixed return on wealth. The headline effective tax rate is 1.60% on the worth of a person's savings and investments.
|Inheritance and gift tax rates|
|Headline inheritance tax rate (%)||
|Headline gift tax rate (%)||