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Netherlands / Netherlands


Location and infrastructure

The Netherlands is part of the Kingdom of the Netherlands, consisting of twelve provinces in North-West Europe and three islands in the Caribbean. The European part of the Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east.


The Netherlands has an estimated population of 16,785,403 (April 2013 est.). The population of the Netherlands is ethnically Dutch 80.7%, EU 5%, Indonesian 2.4%, Turkish 2.2%, Surinamese 2%, Moroccan 2%, Caribbean 0.8%, other 4.8% (2008 est.)


The official language is Dutch, which is spoken by the vast majority of the inhabitants. Another official language is Frisian, which is spoken in the northern province of Friesland, called Fryslân in that language.

English is an official language in the special municipalities of Saba and Sint Eustatius, but it’s also widely spoken all over the Netherlands.


The official currency in The Netherlands is the Euro. However, in the Caribbean Netherlands, the U.S. dollar is used instead of the euro.

Tax system

The corporation tax rate depends on the taxable amount. The taxable amount is the taxable profit in a year less deductible losses.

  • If the taxable amount is less than €200,000, the tax rate is 20%.
  • If the taxable amount is €200,000 or higher, the tax rate is 25%.

Deductible losses

If a business incurs a loss, it can deduct it from its taxable profit:

  • for the previous year (carry back);
  • for up to the next nine years (carry forward)

Capital Gains Tax

No distinction is made between capital gains and other income. In certain cases, capital gains are exempt or a rollover is available based on case law or under the reinvestment reserve.

Dividend withholding tax

The standard withholding tax rate for dividends is 15%. However, several exemptions and reductions, as described below, can apply. Under the extensive Dutch treaty network, the Dutch dividend withholding tax rate is typically reduced to a rate as low as 0%. Under the participation exemption or within a Dutch fiscal unity, dividends paid by resident companies to other resident companies are usually exempt from dividend withholding tax.

VAT rate

The Netherlands has three VAT rates:

  • the general rate of 21%;
  • the reduced rate of 6%, e.g. for food and medicines, specific labour intensive services (such as house painters and plasterers), books and magazines, public passenger transport and water;
  • the zero rate, for certain cross-border transactions such as the export of goods to countries outside the EU. This rate also applies to goods supplied to entrepreneurs within the EU and to certain services that must be provided for exports.

Double tax treaties

The Netherlands has concluded tax treaties with a large number of countries in order to avoid the double taxation of income. Since the country is an open economy with a small domestic market and a large foreign market, it is in its interests to remove obstacles to international trade (such as double taxation). 

The following countries are among those which have double-tax treaties with The Netherlands, although not all have been ratified at the time of writing:

  • Albania
  • Argentina
  • Armenia
  • Australia
  • Austria
  • Azerbaijan
  • Bahrain
  • Bangladesh
  • Barbados
  • Belarus
  • Belgium
  • Bermuda
  • BES Islands
  • Brazil
  • Bulgaria
  • Canada
  • China
  • Croatia
  • Czech Republic
  • Denmark
  • Egypt
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Great Britain and Northern Ireland
  • Greece
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Ireland
  • Israel
  • Italy
  • Japan
  • Jordan
  • Kazakhstan
  • Korea
  • Kuwait
  • Latvia
  • Lithuania
  • Luxembourg
  • Macedonia
  • Malawi
  • Malaysia
  • Malta
  • Mexico
  • Moldova
  • Mongolia
  • Morocco
  • New-Zealand
  • Nigeria
  • Norway
  • Oman
  • Pakistan
  • Poland
  • Portugal
  • Romania
  • Russian Federation
  • Saudi Arabia
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa 
  • South Korea
  • Spain
  • Sri Lanka
  • Surinam
  • Sweden
  • Switzerland
  • Taiwan
  • Tajikistan
  • Thailand
  • The Netherlands Antilles and Aruba
  • The Philippines
  • Tunisia
  • Turkey
  • Turkmenistan
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom 
  • United States of America
  • Uzbekistan
  • Venezuela
  • Vietnam
  • Zambia
  • Zimbabwe

Legal system

The Dutch system of law is based on the French Civil Code with influences from Roman Law and traditional Dutch customary law. The new civil law books (which went into force in 1992) were heavily influenced by the German Bürgerliches Gesetzbuch.


Many Dutch Banks date back to the early days of international trade, although some of the traditional names have disappeared as a result of Mergers and Acquisitions. Today the Dutch Banking market includes three large players: Rabobank, ABN-Amro and ING Bank.

The Dutch banking system is supervised under the efficient twin peak model. The two supervisory authorities are the Dutch Central Bank and The Financial Markets Authority.

Legal Entities

There are two types of legal forms:

  • Legal forms which do not involve a legal person. Your entire personal assets are liable for obligations.

    • Sole trader
    • Vennootschap Onder Firma (VOF) or partnership under common firm
    • Commanditaire Vennootschap (CV) for limited partnership
    • Maatschap or partnership
  • Legal forms which do involve a legal person: you are liable for the amounts that you have invested. Like an individual, a legal form with a legal person has independent rights and obligations.

    • Besloten Vennootschap (BV) or limited liability private company
    • Vereniging or association
    • Stichting or foundation