Tax for businesses in the Netherlands
Any business or person active in the Netherlands is normally subject to a number of taxes.
Taxes on BV companies
The main tax on a Dutch limited companies is called corporate income tax. In Dutch this tax is called Vennootschapsbelasting (or Vpb).
Personal taxes in the Netherlands
To give you a rough estimate you can use the following example:
Business X BV is owned by Mr. Y. He is the 100 percent shareholder and also the managing director.
X BV has a revenue of €250.000. The costs excluding salaries are €100.000.
Mr. Y would like to receive around €50.000 in net income. The minimum director/major-shareholder salary (DGA-salaris) he has to pay is set at €47.000. The shareholder/director in X BV is normally forced to pay out a salary. This is only the case if there are sufficient funds in the company.
Mr. Y decides to pay out the minimum amount of €47.000 in salary. This will be taxed at the progressive income tax rate:
|Personal Income Tax (IB)||2022||2023|
|Bracket 1||37,10% up to €68.508||36,93% up to €73.031|
|Bracket 2||49,50% from €68.508||49,50% from €73.031|
Including payments for social security and the applicable deductions, Mr. Y will keep roughly €32.000 of that €47.000 after tax.
Meanwhile the company has, after general costs and Mr. Y's salary, €103.000 in profit before tax. First of all, X BV will pay corporate income tax at the following rate.
|SME tariff||15% (up to €395.000)||19% (up to €200.000)|
|Standard tariff||25,8% (profits exceeding €395.000)||25,8% (profits exceeding €200.000)|
|Innovation Box||9% on profits derived from qualifying innovative activities||9% on profits derived from qualifying innovative activities|
In this scenario, the business has to pay 15 percent in corporate income tax, so roughly €16.000. Meaning X BV has €87.000 in net profit.
Mr. Y would like to receive a total disposable income of roughly €50.000. The remainder on top of the mandatory major-director/shareholder salary can be paid out as dividend instead of salary. This is taxed at the so-called substantial interest tax in box 2 of the Dutch tax system.
|Box 2: Substantial Interest||2022||2023||2024|
|Up to €67.000||26,9 %||26,9 %||24,5 %|
|Over €67.000||26,9 %||26,9 %||31 %|
This means he should pay out an additional +/- €25.000 of the profits as dividend to himself to add another €18.000 in net income. This makes his total net income roughly €50.000.
X BV pays €16.000 in corporate income tax over a €103.000 profit. Besides that the BV usually incurs employer/wage costs which will not be discussed here.
In our example Mr. Y received a pre-tax income of €72.000 consisting of salary and dividend. He pays around €15.000 in personal income tax and €7.000 in substantial interest tax to receive a pre-tax income of net income of €50.000.