The Netherlands is a highly regulated country with a are very efficient and effective tax office. The level of automation of the Dutch government is medium, but is gradually improving through the effective use of online dashboards, portals and reporting/ filing tools.
Taxes are due are federal, municipal and provincial level.
Any corporation, domestic or foreign, that conducts business in the Netherlands is in essence required to register itself for tax purposes and comply to certain tax reporting, filing and payment obligations.
For most corporations, this will result in a liability for Dutch Corporate income tax and Valued Added Tax (“VAT” or in Dutch “BTW”), and depending on the circumstances, the levy of Dutch Dividend withholding tax or Interest withholding tax.
In addition, any company subject to Dutch tax has the legal obligation to keep an administration, and to store its files and records for a period of at least seven years (in physical or in digital form).
Most individuals that have income or wealth from Dutch sources are liable to Dutch Personal Income Tax, and if they conduct a business, Dutch VAT, for which essentially similar registration, and filing/reporting requirements apply.
In addition, Dutch taxes may be become due if certain events occur or transactions tax place, like typically the Real estate transfer tax (upon he acquisition of Dutch real estate), the Gift and Inheritance tax (upon receipt of gifts and inheritances from Dutch residents), various environmental tax (for manufactures and other owners/operators of industrial equipment), and Car tax (upon the acquisition or import of a car), etc.
Although nowadays the tax office has automated and usually direct access to data available at various government bodies and financial institutions, the primary anchor for the collection and payment of taxes is still the tax return, which in most cases will have to be filed by the tax payer him/herself or by an withholding agent.
Apart from the filing of tax returns, Dutch and foreign corporations which are subject to Dutch tax can nowadays also be required to comply to specific transfer pricing documentation, reporting and filing requirements, as well as the obligation to report certain forms of qualifying aggressive (tax) structures/ arrangements (DAC6).
The compliance to this wide range of tax filing, reporting and tax payments is not always an easy task and must be closely monitored, to avoid the sanctions of non-compliance, which depending on the situation, can typically consist of penalties (which can go up to hundreds of thousands of Euros) and in extreme cases even criminal prosecution. Under specific circumstances non-compliance by a company can also result in personal liability for directors and/or shareholders.
We have best practise software for the compliance to reporting and filing obligations of our clients, and we maintain in the highest level of security and stringent procedures for the exchange and storage of information and data of our clients.
Our consultants deal with complex compliance matters of clients on a day to day basis, and are used to manage the compliance obligations of our clients in a timely and accurate manner.