Taxation of international businesses
The government wants to avoid international businesses being taxed twice. The Netherlands has therefore concluded tax treaties with a large number of countries.
All businesses that are incorporated under Dutch law or that are located in the Netherlands pay tax on their worldwide income in the Netherlands. Worldwide income includes income earned outside the Netherlands.
Non-resident businesses pay corporation tax in the Netherlands on:
- taxable profit from a Dutch business;
- taxable income from a substantial holding in a businesses located in the Netherlands;
- taxable profit from a business located on Aruba, Curaçao or St Maarten or a permanent establishment located on Bonaire, St Eustatius and Saba, subject to certain conditions.
A tax treaty is an agreement between two countries laying down which of them may tax which income. One country will levy taxes and the other will provide a tax reduction or exemption.
A list of the countries with which the Netherlands has signed a tax treaty is available on the Tax and Customs Administration's website.
The Netherlands is in favour of Advance Pricing Agreements (APAs) and Advance Tax Rulings (ATRs). APAs and ATRs are binding agreements made with the Tax and Customs Administration on the application of tax laws to international groups of companies.
APAs and ATRs provide foreign investors with assurance on how national and international tax rules will apply to them in the Netherlands. This avoids differences of interpretation later on. Requests for APAs and ATRs are dealt with by the Rijnmond office of the Tax and Customs Administration.