If, in general, in the business location choices tax incentives matter less than other factors such as market size, costs and the quality of the workforce, the same cannot be said for countries with a similar economic structure. Here then is the law firm van der Waal summarized the major tax incentives for Italian companies wishing to invest in the Netherlands, as can be read in the brochure.
First of all, companies incorporated under Dutch law or having a company in the territory of the State are considered resident effective seat of administration. In this case, all proceeds, wherever they were produced in the world, contribute to the formation of income (worldwide taxation principle). The tax regime to which Dutch companies are subject provides for the application of aordinary tax commensurate with 30% of profits received up to Euro 113.445 and 35% of higher amounts. The income produced by the company is, therefore, subject to full taxation. It is determined by comparing the entity of the shareholders' equity at the beginning and at the end of the reference year. Dividends distributed to shareholders are generally non-deductible and therefore do not erode the tax base.
THEparticipation exemption it concerns all benefits, represented by any type of dividend or capital gain, generated by relevant corporate holdings, both inside and outside the Dutch territory. Participations are conditional by the fact that the percentage of Dutch-owned share capital is not less than 5%. The real estate assets of the subsidiary must not represent more than 10% of the total assets, the shareholding must not be held exclusively for investment purposes (portfolio investment), investee companies must have legal status and capital represented by shares. The same must discount the income tax in the country of residence and the Dutch parent company must not carry out, on an exclusive basis, trading of shares. In addition, all costs associated with an equity interest are tax deductible. Unlike many other European countries, no minimum holding period is required. Finally, it should be noted that the applicability of this rule has been excluded to companies incorporated under Dutch law which hold at least 25% of another company resident in another EU country for the sole purpose of benefiting from the exemption with reference to dividends from companies resident in non-EU countries, to which the participation exemption could not apply directly.
The Netherlands boasts an extensive network of treaties, signed with over 60 countries, aimed at avoid double taxation, thanks to which the amount of withholding taxes on dividends paid by a subsidiary to the Dutch parent company is reduced to zero. In all other countries that do not provide for such a reduction, the withholding tax rate on dividends is set between 5% and 15%.
The Dutch tax system makes one kind of possible group-level taxationwhere a company is taxed as a group together with one or more of its subsidiaries. The losses of one company can then be offset by the profits of another company in the group, while fixed assets can, in principle, be transferred from one group company to another exempt from tax. This simplification provides a single tax returnrather than separate declarations for each individual group company.
Another big plus is the ability to get a preventive tax opinion. This is a document issued by the authorities concerning the tax consequences of a proposed structure or activity which usually takes the form of a prior determination agreement between the tax authorities and the tax payer. This document binds the tax authorities to tax the taxpayer's activities in the manner previously determined, with the certainty about the tax consequences of a transaction or investment. Tax opinions are usually drafted and negotiated by specialist Dutch tax advisers.
Unlike many other countries, Dutch tax law does not provide no withholding tax on outgoing royalties and interest. Furthermore, the tax of 0,55% on the transfer of capital to a company was abolished. This means that the contribution of capital to a company at the time of its incorporation, as well as at any subsequent integration of the share capital, will not be subject to tax.
The Netherlands provides a special facilitation for immigrant workers, the so-called "30% decree”, granted for a maximum period of eight years, which allows the employer an exemption equal to 30% of the employee's remuneration. The 30% decree applies both to low-skilled workers hired in the Netherlands while still abroad, and to medium or high-level workers.
Finally, thanks to the mechanism of inversion contable, the value added tax payable for imports from non-EU countries does not have to be declared and paid at the time of importation, but is included in the periodic VAT return. The entrepreneur can thus declare the VAT amount due for imports as part of the periodic declaration, but can also deduct this amount from it, with considerable advantages for the company's liquidity.
Holland presents, next to the macroeconomic stability, one of the lowest levels of unemployment in the Euro Area. Hence the creation of an economic and political environment, where clear and coherent objectives emerge and an effective synergy between domestic and foreign agents, represents one of institutional requirements most important for generating competitive externalities both for investors and for the workers themselves.
