The Dutch Income Tax Return
The Netherlands is a great country to establish your business. The little country is known for it’s strategically significant geographical location, making it the perfect hub for business. When you run your business, you need to pay taxes. That is no different in the Netherlands. Often, entrepreneurs start a General Partnership (Dutch: vof) or proprietorship (Dutch: eenmanszaak). With these business forms, you must annually file earnings from your business via an income tax return. But what are these income taxes, when do they need to be filed, and how much do they amount for?
Income Tax is the tax that needs to be paid over taxable earnings. In the Netherlands, this needs to be done annually before the first of May over the prior year, and everyone who needs to do so should receive a declaration letter. Taxable income refers to your earnings after accounting for deductions and fiscal arrangements, which may include expenses related to your business. Depending on the company's legal structure, if there is a sole proprietorship (eenmanszaak) or general partnership (vof), one can submit an income tax return. Corporate income tax should be filed if the legal structure is a private limited company (bv), public limited company (nv), or another legal entity. The tax filing can be done by yourself and via a tax intermediary. For filing this income tax, one needs a DigiD to verify identity. DigiD is a verifying tool the Dutch government uses to verify identity. The DigiD can be requested through the Dutch government (Tax and Customs Administration, Belastingdienst, n.d.).
The Income tax is paid over your income without deductible items and fiscal allowances. But the exact height of the Income Tax depends on different factors, such as income, assets, deductible costs, and outstanding debts. By completing the tax return form, the amount will become apparent. Income Tax can either be an obligation requiring payment to the government or an amount you're entitled to receive.
Are you thinking of (re)locating your business? The Netherlands could be a great place to establish your company! But moving your business to a new country is always challenging. Local laws and regulations a different language and culture, can hinder the process of implementing your enterprise in a new place. Thus, it is advisable to have a support system. Q-Business Support can help you implement your business in the Netherlands. With over 25 years of experience in the financial industry, the multilingual, highly skilled team members have become experts in listening and responding to the needs of their clients in many aspects of the business, like accounting, financial reporting, legal and compliance support. Q-Business Support creates tailor-made solutions so you can focus on what matters the most: your business’ growth.