Doing business in the Netherlands. Budapest, November

Transcription

1 Doing business in the Netherlands Budapest, November

2 BAAT at a glance Mid sized firm of accountants and advisors Since employees 3 offices in the Netherlands, 1 office in Belgium

3 BAAT at a glance Accountancy - Due Diligence expertise - Business valuation Tax advisory and - declarations Pay roll Legal Audit (Q Concepts) Trust services (domicile, director) Multi lingual (English, French, German, and Chinese) International praxis German and China desk Cross boarder labour team VAT team Cooperation DBH Group

4 Setting up a business in the Netherlands In general: simple procedure for EU residents Registration of a company takes about 1 to 3 weeks No declaration of non-objection required by Ministry Bank account Registration required at Chamber of Commerce and Tax Authorities (VAT, Corporation tax, wage tax) IMPORTANT: fiscal substance (office, warehouse, etc.)

5 B.V. vs. branch Most common: BV Private limited liability company 1 or more shareholders, only registered shares No minimum capital required (from 1) Incorporation by notary deed Articles of incorporation (name, address, share capital, goals, director(s), power of attorney, share holders meeting, fiscal year) Costs approximately (notary and advisor)

6 branch Not a separate legal entity B.V. vs. branch Establishment in Netherlands is part of foreign legal entity/parent company Parent company bears full liability for the branch Tax exemption for result branch in grant total result parent cy. Discussion with Dutch and/or foreign tax authorities may arise about attribution of p&l components

7 B.V. vs. branch Aspects to consider: - Foreign company is fully responsible for obligations and liabilities (branch) - limitation of liability up to share capital (BV) - equal annual running costs (accounts, VAT, corporate tax declaration) - public deposit of annual accounts (BV or parent company) - commercial motive: doing business with familiar Dutch BV instead of foreign company Baat generally recommends a B.V.

8 Ruling practice General: - Dutch tax authorities are easily accessible, pre filing meeting for orientation is possible, also for smaller companies - No dealing about tax rates! - Front runner in number of modern tax treaties Advance Pricing Agreement (APA): Advance Tax Ruling (ATR): Conformation regarding transfer-pricing issues Confirmation regarding tax consequences

9 Tax treaty NL-HUN Article 5: permanent establishment/branch A fixed place of business through which the business of an enterprise is wholly or partly carried on (office, warehouse, factory, construction site >12 months) Article 6: income from immovable property Income derived by a resident of one of the states situated in the other state may be taxed in that other state.

10 Tax treaty NL-HUN Article 10: dividends Dividend paid to Hungarian individual/tax payer: 15% withholding tax Dividend paid to Hungarian parent company: no withholding tax (EU directive) Article 11: interest No Dutch withholding tax! Article 12: royalties No Dutch withholding tax!

11 Tax treaty NL-HUN Starbucks Ikea Google etc. European Commission criticizes Dutch ruling praxis - Are holdings mailbox companies? - A company in its starting up phase is not a mailbox company.. - Fiscal substance is required: office, staff, daily business.. - Trust praxis is very important

12 Corporate income tax highlights Rates in the Netherlands and neighbour countries: Netherlands ,00% > 25,00% Belgium 33,99% Germany Körperschaftsteuer 15% Gewerbesteuer (average) 15% Total 30%

13 Corporate income tax highlights Participation exemption: Exemption from Dutch tax on all benefits connected with qualifying participation Losses related to qualifying subsidiaries are non-deductible Requirements: Holding holds at least 5% of the subsidiary s capital Participation not held as a portfolio investment, active business is required (tax rate subsidiary >10%, ) Please check every case is different!

14 Corporate income tax highlights Fiscal unity Parent company owns at least 95% shares of subsidiary, then joint application for fiscal unity is possible All companies involved are effectively established in the Netherlands Companies will be viewed as single entity for corporation tax Losses of one company can be set off against the profits of another company Intercompany transactions are non-existent for fiscal consequences

15 Corporate income tax highlights Settlement of losses Carry back 1 year Carry forward 9 years Within fiscal unity: horizontal settlement (within the same fiscal year) between companies before vertical settlement (with other years)

16 Corporation income tax highlights Research & Development facilities Wage costs: (WBSO) reduction of wage tax on wages based upon hours spent on R&D NEW technology (products, processes, software etc.) reduction of payroll tax amounts to 35% of first wage costs and 14% of the excess costs. Innovation box: (I-Box) Corporation tax rate of 5% (in stead of 20%!). WBSO or patent, and Self developed intangible asset (!) Only taxable profits (= turnover minus production costs!) derived from intangible assets can be placed into the box

17 Corporation income tax highlights I Box: example grant total profit in Turnover related to intangible asset Costs developing the intangible asset > Corporation tax without I-Box: ( x 20%) + ( x 25%) = > Corporation tax with I-Box: ( x 20%) + ( x 25%) + ( x 5%) =

18 Fiscal aspects of labour Wage tax rates ,50% (*) ,00%(**) ,00% > 52,00% (*) 28,15% social security premiums, 8,35% taxes (**) 28,15% social security premiums 13,85% taxes

19 30% ruling Fiscal aspects of labour Incentive to attract qualified staff to the Netherlands Tax free reimbursement up to 30% of wage as deemed extra territorial costs Requirements: Specific expertise that s not available or is scarce on Dutch labour market Employee must have lived outside a 150 km radius of the Dutch border Application within 4 months of starting employment Maximum term 8 years Minimum taxable salary (total remuneration approx )

20 Fiscal aspects of labour Without 30% ruling With 30% ruling With 30% without ssp Hungary Paid by employer Less: extra-territorial costs Wage for income tax Tax and premiums (*) Net income Premiums employer Employers costs Effective tax rate 41,40% 24,57% 16,30% 33,50% (*) ssp to be paid in resident state

21 Value added tax (VAT) Standard rate 21%, reduced rate 6% (Germany: 19/7 Belgium: 21/6) Art. 23 deferral license: no VAT due on import from outside EU, VAT liability is shifted to VAT declaration, and deductable -> no VAT cash out! Regular procedure: customs and VAT to be paid at time of import, VAT to be deducted on declaration With deferral license: only customs due at time of import

22 Baat Trust Services Services: Maastricht address domiciliation for fiscal substance providing of board / director (unless active company) Thorough check on client before acceptance due to strict regulations

23 Questions Marcel Bollen t: Paul Thewissen t:

24 28 juni 2012