TAX IMPLICATIONS IN THE NETHERLANDS

Determination taxable profit

Once you have determined your business profit, you probably wonder: How much taxes do I have to pay?

There is a difference between the gross business profit and the taxable profit. As an entrepreneur, you are entitled to several tax advantages. These advantages reduce the taxable profit.

1. Investment deduction

Any asset you purchase for the company with a value of more than € 450 is considered to be an investment. In general, investments must be depreciated in 5 years. The annual depreciation is an expense for the company, not the purchase price.

If you invest for more than € 2,300 per calendar year in your company, you are entitled to the investment deduction. The investment deduction consists of a deduction of 28% of the total sum of investments made in a year. If the total sum of investments in a year exceeds € 56,642, the investment deduction decreases. It may therefore be interesting to expedite or postpone your investments to the next calendar year to take full advantage of the investment deduction.

2. Deductions depending on minimum time spent

Entrepreneurs not operating through a B.V., who spend more than 1225 hours per annum on their business, are entitled to the self-employment deduction and the retirement reservation.

In order to come to 1225 hours, all hours are included; not only the billable hours, but also the hours spent on travel, acquisition, research. It is therefore important to keep track of your hours made for the company.

The 1225 hours apply to the calendar year and will not be recalculated pro rata should you start your business in the cause of the year.

3. Self-employment deduction

The self-employment deduction amounts to € 7,280 but will not be more than your gross profit. In case your gross profit is less than € 7,280, the remaining deduction will be carried forward to the next year.

For the first 3 years of your business, the self-employment deduction is increased to € 9,403 in total. For these 3 years, the deduction can be offset against your gross profit, regardless of the amount of your profit.

4. Retirement reservation

You can deduct 9.44% of your company profit for retirement savings, but no more than € 8,775 per annum. You do not actually have to put this money into a retirement fund, but upon closure of the company the tax office requires you to transfer the full amount of retirement savings into a pension plan. If you do not want to or you are unable to pay the funds into a pension plan, the full amount will be added to your taxable profit. The pension reservation can never be higher than the equity the business has.

5. Small companies discount

There is also a discount for small companies. After considering all the above listed deductions, the remaining profit is reduced with 14%, to come to a taxable profit.

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    Daniel Sokolov
    Daniel Sokolov
    14:41 06 Dec 18
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    Dehlia Kruger
    Dehlia Kruger
    14:08 01 Sep 18
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    Susie Breuer
    Susie Breuer
    15:33 30 Aug 18
    I have used Broadstreet for around 10 years for tax purposes within Holland. I found them knowledgable, responsive and very professional. I would highly recommend them as an expat tax service.
    Benedict Carey
    Benedict Carey
    13:43 06 Nov 17
    Having been bounced around a few tax advisors and almost got my self in hot water by being told the wrong thing, I got a recommendation from another person who had a similar business structure to me. The Broadstreet advisor was efficient and thorough and provided a comprehensive and understandable summary of how to deal with my situation. Relocating between regimes with complex tax laws is never going to be straightforward, at least these guys do put the effort in ... beware of others who will make a suggestion and then disappear when it goes haywire!
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    marco lirio diaz
    09:41 24 Jun 17
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    Deny George
    Deny George
    18:08 19 Dec 19
    Fantastic service and professional advice in really fast time manner. My advisor was Anne and she did excellent on explaining how the tax system works in my case what to do and how to manage to get around as Expat worker who just moved to Netherlands. Absolutely recommended!
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    Dimitrios Vlachopoulos
    22:25 19 Dec 19
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    Nestor Leal
    09:03 12 Nov 19
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    Ari S
    Ari S
    14:22 04 Dec 19
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    James Mckerrow
    James Mckerrow
    08:38 29 Jul 19
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    Deny George
    Deny George
    18:08 19 Dec 19
    Fantastic service and professional advice in really fast time manner. My advisor was Anne and she did excellent on explaining how the tax system works in my case what to do and how to manage to get around as Expat worker who just moved to Netherlands. Absolutely recommended!
    Marcio Gualtieri
    Marcio Gualtieri
    18:23 08 Mar 20
    As other reviewers have mentioned, transparency regarding pricing is a big issue with them... It seems like my experience was not an isolated case... They were very responsive in the beginning when trying to get me on board, after that not so much... Definitely lacking quality and professionalism. Not good value, certainly overpriced...
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    12:08 22 Jan 20
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    Dimitrios Vlachopoulos
    Dimitrios Vlachopoulos
    22:25 19 Dec 19
    Excellent experience with the creation of my BV, as well as 30% ruling. I enjoy working with Elisabeth, who is very responsive and efficient
    Nestor Leal
    Nestor Leal
    09:03 12 Nov 19
    Broadstreet has been a true partner in all my business affairs in the Netherlands. They provide honest, accurate and useful advise in tax, payroll and accounting matters.They will help your business thrive. ;-D
    tokinembourg2 .
    tokinembourg2 .
    08:54 11 Mar 20
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    Sarah Qabbani
    11:35 12 Mar 20
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    Caroline Villamizar Duque
    17:40 12 Mar 20
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    Bret Sewell
    17:46 07 Apr 20
    My family moved to the Netherlands and needed cross-border tax expertise for both our NL business and our personal income taxes. Broadstreet was an exceptionally good partner, making the tax planning and execution aspects of our move and U.S. repatriation seamless and worry-free for us. Broadstreet's deep knowledge of complex cross-border tax matters, ability to work with our U.S. CPA, efficient online systems and processes and superb responsiveness made us a very happy client. I would wholeheartedly recommend Broadstreet to other clients in our situation.
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    paul van der Vegt
    07:30 24 May 20
    Always good advice and swift response from my consultant Elisabeth Bouwer. Top service!
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