![[Amsterdam] 10 key Dutch tax facts for expat entrepreneurs](http://gpa.net/cdn/shop/articles/bigstock-AMSTERDAM-NETHERLANDS--MAY--324138088_1200x.jpg?v=1622191313)
Amsterdam attracts many entrepreneurs - both new and experienced - to launch their startups in the city. According to the latest Startup Heatmap Europe report, Amsterdam was the third most attractive city in Europe to start a company in 2020.
However, creating a startup in a new city or country is challenging. It requires careful planning and awareness of the country’s protocols and regulations. Silicon Canals walks us through those early steps and summarises the ten key facts about the Dutch tax system that every entrepreneur should be familiar with when founding a startup in Amsterdam.
Once you confirm that you are legally entitled to start a business in the Netherlands, finalise the legal business structure (rechtsvorm) of your company - Unincorporated business structures (Rechtvormen zonder rechtspersoonlijkheid) or Incorporated business structures (Rechtvormen met rechtspersoonlijkheid) and have settled on a name and ideal location, the next step is to register the company with the KvK (Kamer van Koophandel); the Dutch Chamber of Commerce. Information about the registration procedure and costs etc. is available there.
Once your company is in the Commercial Register, KvK will pass on your details to the Dutch Tax and Customs Administration (Belastingdienst). A good understanding of the Dutch tax system is imperative before starting your company in Amsterdam. Silicon Canals details the things to keep in mind before launching a startup in Amsterdam, with contributions from Jaap Fox founding partner at Amsterdam-based tax law firm Riverlane Fiscaal juristen. Riverlane is a member of the Dutch Association of Tax Advisers (NOB).
Registering with the Dutch Tax and Customs Administration
According to Business.gov.nl, “Private limited companies and public limited companies have to register via a civil-law notary. The notary will take care of the registration at the Dutch Tax Administration on your behalf. If you do business in the Netherlands, but your company is not permanently established in the Netherlands, you may only need to register with the Dutch Tax and Customs Administration.”
The right tax
To register with the Dutch Tax and Customs Administration, you need to complete the foreign company registration form. The Dutch Tax and Customs Administration, after analysing your information, determines the taxes that are you are required to pay. These include income tax, turnover tax, corporate income tax and payroll tax.
Registering as an employer
Silicon Canals cautions that before hiring your employees, you are required to register as an employer for social security purposes with the Dutch Tax and Customs Administration. Business.gov.nl advises, “You will then receive a payroll tax number and several forms to fill in. The payroll tax number is relevant for filing your annual payroll tax return and communication with the Dutch Tax and Customs Administration.”
The 30 per cent rule
According to Jaap Fox, as an employer, the two tax-centric rules Amsterdam-based startups should bear in mind are the 30 per cent rule and a subsidy on wages called WBSO. Internationals employees who have been recruited from abroad for a position in the Netherlands may be eligible for the 30 per cent tax ruling.
According to Iamsterdam, the 30 per cent reimbursement ruling (also known as the 30 per cent facility) is a tax advantage for highly skilled migrants moving to the Netherlands for a specific employment role. When the necessary conditions are met, the employer can grant a tax-free allowance equivalent to 30 per cent of the gross salary subject to Dutch payroll tax. Employees applying for the 30 per cent ruling after January 1, 2019, receive the benefit for 5 years.
The WBSO scheme
Companies that carry out research and development work (Speur en Ontwikkelingswerk, S&O or R&D) may be eligible for compensation of wage costs and additional costs under the WBSO scheme. According to the Netherlands Enterprise Agency, each year, the Dutch government allocates the WBSO budget as part of the Tax Plan.
For 2020, the WBSO budget was €1,281M. If your company is a startup and you received an R&D declaration granting a benefit for new businesses, you may be able to make use of the customary salary scheme or the share option programme for startups.
Tax schemes for new businesses
The Dutch government also offers various tax benefits and schemes for new businesses. If you started a new business in the Netherlands and are liable for income tax in the Netherlands, you may be eligible for tax relief for new companies (startersaftrek). This is part of the entrepreneur allowance (ondernemersaftrek). By utilising this facility, you will end paying less tax. This is because you are allowed to deduct a set amount from your annual gross profit.
Entrepreneur allowance
According to Business.gov.nl, business owners in the Netherlands may be eligible for the entrepreneur allowance (ondernemersaftrek). Deducted from profit so that the entrepreneur pays less tax, the entrepreneur allowance includes private business ownership allowance, tax relief for new companies (increased private business ownership allowance), working partner’s abatement, R&D tax credit (WBSO), discontinuation relief and tax relief for new companies in the event of incapacity for work. The maximum rate for the entrepreneur allowance is 46 per cent. Information on how to apply for it is available here.
Innovation Box
Mr Fox also talks about a special regime for innovative businesses called the innovation box. Introduced by the Dutch government, the innovation box helps to fiscally stimulate innovative activities. It is a special tariff box on your corporate income tax return allowing you to pay less corporate income tax.
Corporate income tax
According to Mr Fox, once a startup is up and running in Amsterdam it has to pay corporate income tax, which is currently 15 per cent on profits up to €245,000 and 25 per cent for profits exceeding €245,000.
Ensure you qualify as an entrepreneur
In order to utilise the tax relief schemes for new companies, the Dutch Tax and Customs Administration must regard you as an entrepreneur. This can be checked here.
Source: Silicon Canals
(Links via original reporting)
Amsterdam attracts many entrepreneurs - both new and experienced - to launch their startups in the city. According to the latest Startup Heatmap Europe report, Amsterdam was the third most attractive city in Europe to start a company in 2020.
However, creating a startup in a new city or country is challenging. It requires careful planning and awareness of the country’s protocols and regulations. Silicon Canals walks us through those early steps and summarises the ten key facts about the Dutch tax system that every entrepreneur should be familiar with when founding a startup in Amsterdam.
Once you confirm that you are legally entitled to start a business in the Netherlands, finalise the legal business structure (rechtsvorm) of your company - Unincorporated business structures (Rechtvormen zonder rechtspersoonlijkheid) or Incorporated business structures (Rechtvormen met rechtspersoonlijkheid) and have settled on a name and ideal location, the next step is to register the company with the KvK (Kamer van Koophandel); the Dutch Chamber of Commerce. Information about the registration procedure and costs etc. is available there.
Once your company is in the Commercial Register, KvK will pass on your details to the Dutch Tax and Customs Administration (Belastingdienst). A good understanding of the Dutch tax system is imperative before starting your company in Amsterdam. Silicon Canals details the things to keep in mind before launching a startup in Amsterdam, with contributions from Jaap Fox founding partner at Amsterdam-based tax law firm Riverlane Fiscaal juristen. Riverlane is a member of the Dutch Association of Tax Advisers (NOB).
Registering with the Dutch Tax and Customs Administration
According to Business.gov.nl, “Private limited companies and public limited companies have to register via a civil-law notary. The notary will take care of the registration at the Dutch Tax Administration on your behalf. If you do business in the Netherlands, but your company is not permanently established in the Netherlands, you may only need to register with the Dutch Tax and Customs Administration.”
The right tax
To register with the Dutch Tax and Customs Administration, you need to complete the foreign company registration form. The Dutch Tax and Customs Administration, after analysing your information, determines the taxes that are you are required to pay. These include income tax, turnover tax, corporate income tax and payroll tax.
Registering as an employer
Silicon Canals cautions that before hiring your employees, you are required to register as an employer for social security purposes with the Dutch Tax and Customs Administration. Business.gov.nl advises, “You will then receive a payroll tax number and several forms to fill in. The payroll tax number is relevant for filing your annual payroll tax return and communication with the Dutch Tax and Customs Administration.”
The 30 per cent rule
According to Jaap Fox, as an employer, the two tax-centric rules Amsterdam-based startups should bear in mind are the 30 per cent rule and a subsidy on wages called WBSO. Internationals employees who have been recruited from abroad for a position in the Netherlands may be eligible for the 30 per cent tax ruling.
According to Iamsterdam, the 30 per cent reimbursement ruling (also known as the 30 per cent facility) is a tax advantage for highly skilled migrants moving to the Netherlands for a specific employment role. When the necessary conditions are met, the employer can grant a tax-free allowance equivalent to 30 per cent of the gross salary subject to Dutch payroll tax. Employees applying for the 30 per cent ruling after January 1, 2019, receive the benefit for 5 years.
The WBSO scheme
Companies that carry out research and development work (Speur en Ontwikkelingswerk, S&O or R&D) may be eligible for compensation of wage costs and additional costs under the WBSO scheme. According to the Netherlands Enterprise Agency, each year, the Dutch government allocates the WBSO budget as part of the Tax Plan.
For 2020, the WBSO budget was €1,281M. If your company is a startup and you received an R&D declaration granting a benefit for new businesses, you may be able to make use of the customary salary scheme or the share option programme for startups.
Tax schemes for new businesses
The Dutch government also offers various tax benefits and schemes for new businesses. If you started a new business in the Netherlands and are liable for income tax in the Netherlands, you may be eligible for tax relief for new companies (startersaftrek). This is part of the entrepreneur allowance (ondernemersaftrek). By utilising this facility, you will end paying less tax. This is because you are allowed to deduct a set amount from your annual gross profit.
Entrepreneur allowance
According to Business.gov.nl, business owners in the Netherlands may be eligible for the entrepreneur allowance (ondernemersaftrek). Deducted from profit so that the entrepreneur pays less tax, the entrepreneur allowance includes private business ownership allowance, tax relief for new companies (increased private business ownership allowance), working partner’s abatement, R&D tax credit (WBSO), discontinuation relief and tax relief for new companies in the event of incapacity for work. The maximum rate for the entrepreneur allowance is 46 per cent. Information on how to apply for it is available here.
Innovation Box
Mr Fox also talks about a special regime for innovative businesses called the innovation box. Introduced by the Dutch government, the innovation box helps to fiscally stimulate innovative activities. It is a special tariff box on your corporate income tax return allowing you to pay less corporate income tax.
Corporate income tax
According to Mr Fox, once a startup is up and running in Amsterdam it has to pay corporate income tax, which is currently 15 per cent on profits up to €245,000 and 25 per cent for profits exceeding €245,000.
Ensure you qualify as an entrepreneur
In order to utilise the tax relief schemes for new companies, the Dutch Tax and Customs Administration must regard you as an entrepreneur. This can be checked here.
Source: Silicon Canals
(Links via original reporting)
