Corporate tax compliance in the Netherlands

Registration with the tax authorities

Starting a business in the Netherlands, using a legal entity (B.V.), or establishing a Branch requires registration with the Dutch tax authorities.

In most cases, registration with the tax authorities follows automatically after the registration with the Chamber of Commerce (Trade Register). Dutch legal entities, by nature, will be registered in the Trade Register upon incorporation; Branches of foreign corporations must be registered by filing certain standard forms.

It will depend on the circumstances whether or not the registration of a Branch is technically possible. The question at hand is whether or not the foreign corporation has sufficient substance and presence in the Netherlands to be considered to conduct business in the Netherlands.        

Based on the information provided to the Trade Register, especially about the activities that will be performed, the tax authorities determine the tax status and issue the related tax registration numbers, in any case, the general tax number (RSIN). This tax number is the entry ticket into the corporate tax system and will further depend on whether or not a VAT number is directly issued.   

The VAT number is not immediately issued but requested separately, especially for foreign-owned and managed legal entities. To determine whether or not the actual presence and activities in the Netherlands justify the issue of a Dutch VAT number, the tax office may require the company to fill out a questionnaire. They reason that a company does not need a Dutch VAT number if it does not conduct business activities in the Netherlands, although this is still technically debated,

For more information about the Dutch VAT system, consult our publication, The Levy of Value Added Tax (VAT) in the Netherlands. 

To set up a payroll in the Netherlands, the employer must register as a withholding agent and apply for a wage tax number, a separate registration procedure.       

For more information about setting up a payroll in the Netherlands, please consult our publication, Payroll Obligations in the Netherlands. 

Filing a corporate income tax return

Every company (Dutch or foreign registered as a corporate taxpayer in the Netherlands must file a corporate income tax return annually. The taxpayer will receive an invitation to file the tax return at the start of the fiscal book year since tax returns should be filed when such an invitation is received.

When no invitation for filing a tax return is received, the taxpayer has the legal obligation to ask for the issuance of such an invitation if there are reasonable grounds to assume that there is a corporate tax payment obligation.     

The standard corporate income tax return for Dutch tax residents requires information to be provided about:

• The company, its shareholders, subsidiaries, and branches, 
• Its fiscal balance sheet and P&L, 
• A consolidation of the relevant fiscal balance sheets and P&Ls for fiscal units,  
• A reconciliation of the differences between the fiscal balance sheet and P & L and the statutory accounts, 
• Fiscal adjustments to statutory profits, limitations for the deduction of expenses, the exemption of particular income categories, special tax facilities to be applied, etc.   

This also applies to non-resident corporate taxpayers (branches), but a simplified tax return form can be used.  

For more information about the Dutch corporate income tax return, please consult our publication, The Dutch corporate tax regime. 

When does the annual corporate income tax return need to be filed   

The return must be filed within five months of the start of the fiscal book year; i.e., for a fiscal year ending on December 31, the tax return must be filed before June 1 of the following year.

An extension for filing the tax return can be obtained, with a maximum of eleven months (for a financial year closed on December 31, the return must be filed before May 1 (in the second year).

Corporate income tax assessments

During a tax year, provisional assessments can be raised.

For a profitable company with an ongoing business, the first preliminary assessment can be expected during the first month of the fiscal tax year. Provisional assessments are usually based on the information of the preceding two fiscal years. An appeal against this assessment is possible if it does not correspond with the expectations for that year in question, which is the expected taxable result.

Additional provisional assessments can be levied either based on an estimation of the taxable income to be provided by the taxpayer by filing a preliminary tax return or (typically within six weeks) after filing the final tax return. 

A preliminary assessment can be issued for obtaining a tax refund instead of loss, provided these losses are recognized as such in the previously filed loss decrees or corporate income tax returns file.    

The tax office issues a final assessment based on the tax return filed and if the tax return is agreed upon. The statutory term for the annual final tax assessment is three years, increased with the extension for filing obtained.   

Any provisional assessments issued for the fiscal year are offset against the final assessment and may result in a tax payment obligation, a tax refund, or a nil assessment. The final assessment will include a loss decree confirming the amount of tax losses accumulated by the end of the tax year.   

When a tax return is not filed or not filed promptly, the tax inspector may issue an assessment on an estimated basis. The taxpayer can appeal against this assessment but will bear the burden of proving the estimated taxable amount. 

Adjustments

Upon processing a corporate income tax return, the tax inspector may scrutinize the contents of the tax return filed, investigate, and raise questions with the taxpayer. A taxpayer is not obliged to answer questions, but if it refuses, this may result in a reversal of the burden of proof.

In case the tax inspector suspects fraud or criminal intent, the inspector is supposed to report this to be investigated further by the fiscal intelligence and investigation unit (FIOD). The FIOD has investigative power.        

When the tax inspector thinks the tax return adjustments should be adjusted, he will notify the company in writing before issuing corresponding assessments. 

Additional assessments can be levied only if new facts come to the attention of the tax office. A change of a law policy or case law should not affect tax assessments levied that have become finalized and for which the final appeal term has expired.

The statute of limitations for raising additional assessments is under normal circumstances five years after the end of the tax year concerned (extended by the period that the extension of filing is obtained). Specific rules may apply if foreign sources of income are involved.

Tax audits

Tax audits on companies take place periodically and are usually announced in advance.

Interest and penalties

A corporate taxpayer can become tax interest due (“belastingrente”) if it appears to have a tax payment obligation six months after the end of the fiscal year. If the annual tax return is filed within five months of the end of the fiscal year, no tax is imposed. No tax interest will be charged if the taxpayer requests a provisional assessment before the fifth month following the fiscal year.   

Tax interest is calculated from the first day of the seventh month after the fiscal year up to six weeks after the assessment date. If processing a tax return by the tax office exceeds a term of three months, special rules apply. For additional assessments, the interest period runs from the first day of the seventh month following the fiscal year to 1 month after the assessment date.  

The interest rate for corporate income tax purposes is linked to the legal interest rate for commercial transactions, which currently is set at 8% (2023). It is possible to adjust the rate periodically.

Dutch corporate tax law provides for diverse penalties, which can be imposed in case of, among others, non-filing, late filing, or filing incorrect tax returns. Penalties can be set as a lump sum or a percentage of tax due. The tax authorities usually impose these penalties as they are considered part of the Dutch penal system to which special rules apply.

Appeal

Any tax assessment issued gives the taxpayer the right to file an appeal within six weeks after the date of issuance. An appeal can relate to the tax imposed or the penalties levied.

If the taxpayer disagrees with the decision of the tax inspector on his appeal, the taxpayer has the right to file an appeal at the lower Courts and, ultimately, on a matter of law only, to the Dutch Supreme Court.

The taxpayer must file the appeal (or his authorized representative) at the latest six (6) weeks after (the date of) the decision of the tax inspector on the objection. It is possible to appeal against all the decisions of the tax authorities, to which it is open to file an objection.   

Collection of tax

The tax collector handles the taxes; Federal tax payments and tax refunds go through this institute. 

The tax collector has all the authorities that any creditor has, but also additional authorities, including the seizing of assets and the application for bankruptcy.    

Taxpayers may pay the tax due on provisional assessments of the current year at once or in monthly installments if the assessment is levied before the end of the year to which it relates.

Payments on the final assessment are due within two months after the date of issue unless the collector grants an extension, for instance, pending a decision on appeal. If not fully paid on the due date, interest is charged till payment.

What can we do for you? 

We can manage the Dutch corporate tax compliance of your Dutch companies, which can typically include the 

• Tax registration and de-registration 
• Review of the tax provision in the financial statements
• Preparation and filing of the annual corporate income tax return
• Filing applications for available tax facilities
• The filing of formal objections and appeals 
• Review assessments and monitor tax refunds and tax payments 
• Representation towards the Dutch tax office. 

If you are interested in our services, contact us via e-mail or call our office in Amsterdam at +31 (20) 5709440 or our office in Rotterdam at +31 (10) 2010466.