Tax advisory
Tax advisory
This domain focuses on Dutch corporate income tax (Vpb), personal income tax (IB), wage tax, and turnover tax (BTW), with emphasis on advisory planning and compliance. Key concepts include the participation exemption (deelnemingsvrijstelling), the innovation box (innovatiebox), loss carry-forward rules (verliesverrekening), and the arm's-length principle for transfer pricing. For personal income tax, understand the three boxes (Box 1: income from employment and home; Box 2: substantial shareholding; Box 3: savings and investments), the 30% ruling for expatriates, and the eigen woning regime. For BTW, know the distinction between goods and services, the place of supply rules, and the reverse-charge mechanism.
Traps include: applying the participation exemption when the subsidiary is a low-taxed passive entity (must meet subject-to-tax test); misclassifying a loan as equity under the debt-equity rules; forgetting that Box 3 uses a deemed return, not actual return; and overlooking the VAT exemption for certain services (e.g., education, healthcare). Another trap is the fiscal unity (fiscale eenheid) requirements: 95% ownership, same financial year, and joint application.
Worked example (rule of thumb): A BV holds 100% of a subsidiary in Germany. Dividends received are exempt under the participation exemption if the subsidiary is subject to a reasonable tax rate (at least 9% in 2024) or meets the active business test. Always check the subject-to-tax test first; if not met, the exemption may still apply if the subsidiary is an active company.
Rule of thumb: For any cross-border transaction, first determine the tax base and the applicable tax rate in both jurisdictions, then apply the relevant exemption or credit, and finally consider treaty relief.