The Netherlands is a highly regulated country with a are very efficient and effective tax office. The level of automation is medium, but is gradually improving through the effective use of dashboards, portals and reporting and filing tools.
Any corporation, domestic or foreign, that conduct business in the Netherlands is in essence required to register itself for tax purposes and comply to 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.
Any company conducting business has the legal obligation to keep an administration, and to store its files for a period of at least seven years (in physical or in digital form). Non-compliance to this requirement, can result in the levy of penalties, and in extreme cases criminal prosecution, but also the reversal of the burden of proof for the levy of tax, and allowing the Dutch tax office to raise tax assessment on the basis of (a fair) estimate.
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.
In addition Dutch taxes may be become if certain events occur or transactions tax place, like typically
Real estate transfer tax (upon he acquisition of Dutch real estate),
Gift and Inheritance tax (upon receipt of gifts and inheritances from Dutch residents),
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 requirememts, 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 an easy task and must be closely monitored, to avoid the sanctions of non-compliance, which depending on the situation can 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 for the exchange and storage of information and data of our clients.
Our consultants deal with complex compliance matters on a day to day basis, and are used to manage the compliance obligations of our clients on a day to day basis.