Financial Year – 1 January – 31 December
Currency – Euro (EUR)

Corporate Tax Summary


Corporate Income Tax
Corporate income tax is charged to legal entities of which the capital is partially or fully divided into shares. Examples of such legal entities are the Dutch NV and BV. Companies based in the Netherlands are taxed on the basis of the companies’ local revenues. The question as to whether a company is in effect based in the Netherlands (resident companies) for tax purposes is assessed on the basis of the factual circumstances. The relevant criteria are issues such as where the actual management is based, the location of the head office and the place where the annual General Meeting of shareholders is held. Entities set up under Dutch law are deemed to be established in the Netherlands. A resident company is in principle subject to Dutch corporate income tax for its profits received worldwide. Non-resident companies may be subject to corporate income in the Netherlands on Dutch source income. This is outlined later.

Non-Resident Companies
Non-resident companies may be subject to corporate income tax in the Netherlands on Dutch source income. A non-resident company receives Dutch source income in three ways.

The first way is if the non-resident company operates in the Netherlands using a Dutch permanent establishment or permanent representative. The determination of taxable profits of a permanent establishment/representative is similar to the rules applicable to a subsidiary. A second way to receive Dutch source income arises if a non-resident company has a so-called substantial interest representing at least 5% of the shares in a company established in the Netherlands if the main aim, or one of the main aims of holding a substantial interest, is to avoid the levying of Dutch personal income tax at (in)direct shareholder level and there is an artificial arrangement or a series of artificial arrangements which are not put in place for valid commercial reasons reflecting economic reality. The taxation applies to dividend income and capital gains derived from its Dutch subsidiary.

In addition, non-resident companies could be liable to corporate income tax on the remuneration for formal directorship of companies residing in the Netherlands as well as for fees received for executive management services. Under a tax treaty the taxation right for these remunerations are mostly allocated to the state of residence of the non-resident company.

Basis of Taxation

Tax Base and Rates
Corporate income tax (CIT) is charged on the taxable profits earned by the company in any given year less the deductible losses. The following are the applicable corporate income tax rates for 2020:

Profits up to EUR 200,000: Rate 16.5%

Profits in excess of EUR 200,000: Rate 25.0%

Through 2021, the government has announced a gradual reduction of the CIT rates to 15% on the first EUR 200,000 of profit and 21.7% for profits exceeding this amount.

For financial years up to and including 2018, losses incurred in any given year can be set off against the taxable profits of the previous year and the 9 subsequent years. As of 2019 the carry forward is reduced to 6 years. Part of this reduction is the introduction of a transitional measure, based on which the losses of 2019 and 2020 can be used before the 2017 and 2018 losses.

Company profits must be determined on the basis of sound commercial practice and on the basis of a consistent operational pattern. This means, among other things, that unrealised profits do not need to be taken into consideration. Losses, on the other hand, may be taken into account as soon as possible. The system of valuation, depreciation and reservation that has been chosen must be fiscally acceptable and, once approved, must be applied consistently. The tax authorities will not subsequently accept random movements of assets and liabilities.

As a general rule all business expenses are deductible when determining corporate profits. There are however a number of restrictions with respect to what qualifies as business expenses.

Valuation of Work in Progress and Orders in Progress
In work and/or orders in progress, profit taking may not be postponed. Work in progress should be valued at the part of the agreed payment attributable to the work in progress already carried out. The same applies for orders in progress.

Arm’s Length Principle
Dutch corporate income tax legislation includes an article that determines that national and foreign allied companies are entitled to charge one another commercial prices for mutual transactions. This is, however, subject to an obligation to keep due documentation of all relevant transactions. This enables the Dutch tax authorities to determine whether the transactions between the applicable allied companies are conducted based on market prices and conditions. It is possible to obtain prior assurance of the fiscal acceptability of the internal transaction with the use of the so-called ‘Advance Pricing Agreement’.

Limited Depreciation on Buildings
Annual depreciation is deductible from the annual profits from business operations. The taxpayer is entitled to depreciate the building until the book value has reached the so-called base value. The base value is determined with reference to the WOZ value. The base value is equivalent to the WOZ value (WOZ for ‘Wet waardering onroerende zaken’ or Real Estate Valuation Regulations). Based on the latter regulations, the value of a building for tax purposes is determined, to the greatest extent possible, on the basis of its value in the economic environment. The tax base value for buildings used as investments is 100% of the WOZ value, which as of 2019 also applies to owner-occupied buildings. The previous tax base value of this type of building was 50% of the WOZ-value.

There is a transitional ruling for buildings taken into use before 2019 and which have not yet been written down over 3 full financial years before 2019. In this case, for the remaining period a building in own use can be written down on the basis of 50% of the WOZ. This further restriction in writing down does not apply as of 2019 for the entrepreneurs/natural persons discussed above.

Arbitrary Depreciation
In the Netherlands, the rule is that no more than 20% per year of acquisition or production costs may be depreciated on operating assets, other than buildings and goodwill. The minimum depreciation period is therefore 5 years. Under certain conditions, goodwill can be depreciated by a maximum of 10% per year.

Innovatiebox (Innovation box)
Companies that have developed intangible assets (an invention or technical application) can deduct the development costs from the company’s annual profits in the year in which the asset was developed. Under international pressure, including the OECD initiatives relating to Base Erosion and Profit Shifting, the Innovation Box regulations have been tightened up. The new rules for access to the innovation box apply from 1 January 2017 and their application has been restricted to intangible fixed assets produced after 30 June 2016. The innovation box as a facility is in principle now only open to enterprises with actual economic activities in the Netherlands, where the intention is now only to grant a tax subsidy for an innovation developed in the own enterprise in the Netherlands. The innovation box benefits are then determined using a ratio between qualifying and non-qualifying innovation expenditure (nexus break).

Only ‘intangible fixed assets’ produced by the enterprise itself can qualify for the innovation box. Purchased intangible fixed assets do not qualify, except that a purchased intangible asset that is then developed further may again qualify if the further development results in a ‘new’ intangible asset.

Under the new rules access to the innovation box is only open to intangible assets for which a so-called R&D declaration was issued by the Netherlands Enterprise Agency (RVO). This is a departure from the legislation applicable up to 2017, under which holding a patent was already sufficient for the company’s option to place the benefits in the so-called innovation box.

Furthermore, for access to the innovation box from now on a distinction is made between small and larger taxpayers. In addition to an R&D declaration, larger taxpayers (consolidated group turnover of more than EUR 50 million per year and turnover from intangible fixed assets of more than EUR 7.5 million per year) must have a recognised legal access ticket. This includes, among other things, patents, rights similar to patents such as utility models, cultivator rights, drugs and software. Intangible assets that relate to biological crop protection products based on live (micro-)organisms may also qualify for the innovation box. These stricter access requirements of a recognised legal access ticket do not apply for smaller qualifying enterprises as such.

Up until the last financial year ending before 1 July 2021 the ‘old’ innovation box scheme remains in force, but only for innovations to which the innovation box scheme already applied as of 30 June 2016. The result of this is that all intangible fixed assets qualifying before 1 July 2016, for which the innovation box applied in the declaration for the financial year in which 1 July 2016 falls, may still avail themselves of the old scheme for a maximum of five more years calculated from this date.

The rate of corporation tax for innovative activities amounts to 7% (2020). From 2021 this will rise to 9%. Losses on innovative activities can from now on be deducted at the normal corporate income tax rate. The outsourcing of R&D work is also possible if the principal has sufficient activities and knowledge present. It is also possible to include innovation advantages obtained between the application for a patent and the granting of a patent in the innovation box. There is no maximum to the profit taxed at the special rate of 7% (2020).

A company has the option to declare an innovation box benefit equal to 25% of the company’s total profit instead of complex profit allocation to the qualifying intangible asset(s). The benefit is, however, limited to the amount of € 25,000. The option is valid in the investment year and in the following 2 years.

However, a number of additional technical and administrative conditions must be fulfilled to be able to qualify for the aforementioned tax benefits: For example, to make use of the innovation box the intangible assets must contribute at least 30% to the profit that the company receives from the intangible asset. The innovation box does not apply to brands, logos, TV formats, copyrights on software and so on. The choice must be specified in the corporate income tax declaration.

Participation Exemption
Participation exemption, or substantial holding exemption, is one of the main pillars of corporate income tax. The scheme was introduced to prevent double taxation. Profit distribution between group companies is exempted from tax.

A participation refers to a situation where a company (the parent company) is the owner of at least 5% of the nominal paid-in capital of a company that is based either in the Netherlands or abroad (the subsidiary). A cooperative membership qualifies as well, regardless of its share in the cooperative’s capital.

Under the participation exemption, all benefits derived from the participation are tax exempt. The benefits include dividends, revaluations, profits and losses in the sale of the participation and acquisition and sales costs. The participation exemption also applies to revaluations of assets and liabilities from earn-out and profit guarantee arrangements. If the value of the participation falls due to losses incurred, devaluation by the parent company is in principle not permitted. Losses arising from the liquidation of a participation can, under certain conditions, be deducted.

As a general rule, participation exemption does not apply if the parent company or subsidiary is an investment institution. It is, however, possible to appeal for a ‘reduced tax investment participation’. To determine whether the participation exemption applies an intent test is used. This means looking at whether or not the participation is held as an investment. A participation in a company whose balance sheet consists, for example, of liquid assets, debentures, securities and debts is regarded as an investment. In the latter case, the participant is not entitled to participation exemption, but is however entitled to apply for a tax credit. It is common practice to apply for an Advance Tax Ruling on the qualification of the participation under the participation exemption provision.

Because a number of conditions have to be satisfied in order to apply for a tax credit exemption, factual and circumstantial changes can affect the tax (exempt) status of a participation. In this case, the capital gains or losses on this participation must be partitioned into a taxable and non-taxable part (partitioning doctrine). In addition, tax law provides for a participation to be revalued at fair market value once the participation tax regime changes. The revaluation result (positive or negative) is, among other qualifying occurrences, added to a separate reserve (partitioning reserve). The reserve must be released upon disposal of the corresponding participation. A partial disposal triggers a pro rata release.

With effect from 2016, as a result of an amendment in the European Parent/Subsidiary Directive intended to combat abuse and undesirable schemes, the participation exemption no longer applies to benefits from foreign enterprises if these benefits consist of fees or payments that can be deducted by the participation when determining its profit for tax purposes and are hence regarded as deductible interest charges. The place of establishment of the participation is not relevant here. The exclusion of the participation exemption is also aimed at benefits received that serve to replace the fees referred to in the previous sentence. This relates to so-called hybrid finance. This restriction of the participation exemption does not, in principle, apply to the benefits obtained with the disposal of the enterprise and currency results obtained.

Controlled Foreign Companies
As of 2019, CFC rules have been introduced, which (further) aim to prevent profit shifting to low-taxed jurisdictions. The new CFC ruling ensures certain ‘tainted’ income in the form of interest, royalties and dividends.

A corporation qualifies as a CFC if:

  1. The Dutch tax paying body – together with a related body or natural person – has a direct interest of more than 50% in a foreign body, or if this is a permanent establishment.
  2. The foreign body or the permanent establishment is in a country with a low statutory income tax rate (less than 9%), or in a country included in the EU list of non-cooperative jurisdictions for tax purposes.

If the foreign company or permanent establishment is qualified as a CFC, undistributed ‘passive’ income (including interest, royalties, dividends and leasing income) of the CFC are taxed at the level of the Dutch controlling company, unless the activities of the CFC include significant economic activities. The latter is the case when the CFC (a) receives at least 70% non-passive income or (b) meets the Dutch relevant substance requirements, or the CFC qualifies as a financing vehicle for which at least 70% of the tainted benefits are received from third parties.

The avoidance of double taxation is provided for profits that on the basis of the CFC legislation are already taxed in the Netherlands and later paid out to the Dutch parent company.

Object Exemption for Permanent Establishments
An object exemption exists for foreign permanent establishments of companies based in the Netherlands. As a result, the profits and losses of a foreign permanent establishment do not affect the Dutch tax basis. Final losses of foreign permanent establishments that remain upon cessation (termination) can, however, still be deducted. The object exemption does not apply to profits from so-called passive permanent establishments in low-taxation countries and to passive income of permanent establishments qualifying as CFCs.

Fiscal Unity
If the parent company owns at least 95% of the shares of a subsidiary, the companies can submit a joint application for fiscal unity to the tax authorities, whereby the companies will be viewed as a single entity for corporate income tax purposes. The 95% shareholding should represent 95% or more of the voting rights and at least a 95% entitlement to the subsidiary’s capital. The subsidiary is thereby effectively absorbed by the parent company. One of the most important advantages of fiscal unity and its tax consolidation of companies, is the fact that the losses of one company can be set off against the profits of another company in the same group. The companies are thereby also entitled to supply goods and/or services to one another without fiscal consequences, and they are also entitled to transfer assets from one company to another.

Fiscal unity is only permissible where all of the companies concerned are effectively established in the Netherlands. The current legislation provides the option to include in the tax consolidation of the fiscal unity a Dutch permanent establishment of a non-resident group. In addition, the parent company and the subsidiaries must also use the same financial year and be subject to the same tax regime.

On the basis of legal precedents in 2014, Dutch legislation now also permits fiscal unity via a foreign company. As a result fiscal unity is permitted between:

  • A Dutch parent company and a Dutch sub-subsidiary with a foreign intermediate company established in an EU/EEA Member State.
  • Two Dutch sister companies with a foreign parent company established in an EU/EEA Member State.

On 22 February 2018, the Court of Justice of the European Union (CJEU) concluded that the Dutch fiscal unity is in violation of the EU freedom of establishment. According to the CJEU ruling, the Dutch fiscal unity regime may not favour domestic groups by allowing a benefit that is not open to cross-border groups, while such a fiscal unity in cross-border situations is not permitted. As a result, the Dutch government has introduced repair measures which adjust the fiscal unity regime with retroactive effect to 1 January 2018. It is expected that this will ultimately lead to an alternative fiscal consolidation regime.

Limitations of Interest Deduction

Earnings Stripping Rule
The earnings stripping rule came into effect from 1 January 2019 and applies for financial years beginning on or after this date. The earnings stripping rule is a generic interest deduction for the balance of the interest payable on third-party and group loans. It concerns the difference between the interest charges and interest income relating to loans and similar agreements (balance of interest). Using a fixed percentage of earnings before interest, tax, depreciation and amortisation (roughly speaking the gross operating result, EBITDA), the balance of interest is subject to restricted deduction.

Effective as of 1 January 2019, the earnings stripping rule limits the deductibility of net interest expenses to the higher of (i) 30% of the EBITDA or (ii) a threshold of EUR 1 million. The rule does not make a distinction between third party and related party interest and is therefore a generic limitation of interest deduction. By taking the EBITDA for tax purposes as the starting point, the interest deduction is thus linked to the taxable economic activity of a taxpayer. In the case of fiscal unity, the earnings stripping rule is applied at fiscal unity level. Finally, the earnings stripping rule applies to both existing and new loans. Interest that cannot be deducted based on the earnings stripping rule can be carried forward indefinitely.

Anti-Base Erosion Regulation
The anti-base erosion rules in Dutch corporation taxation restricts the deduction of financing costs of intragroup loans if these loans in essence relate to the conversion of equity into financing through debt without sound business motives. This comprises loans relating to inter alia dividend distributions, repayment of formal and informal capital and capital contributions. On the other hand, the anti-base erosion rules also entail the possibility to overrule this restriction in tax deduction of the relating financing costs if the taxpaying company can demonstrate that the sound business motive for this debt financing exists or the interest payment is effectively taxed at a rate of 10% or more. However, the Dutch tax authorities may demonstrate that in the case of a group transaction, no business considerations are involved even if the recipient pays 10% or more tax abroad. In that case, the interest paid within the group is not deductible. The interest for ordinary business transactions does, however, remain deductible.

OECD Standard Transfer Pricing Documentation and Country-by-Country Reporting
Commencing in 2016 additional documentation obligations apply for multinationals regarding their internal transfer prices used between enterprises in the different countries.

New obligations relating to the submission of a country-by-country report, a master file and local file:
This applies if the consolidated group revenue is more than EUR 750 million. The ultimate parent company submits the country-by-country report in the country where it is established. The master file contains a summary of the transfer pricing policy of the group. The local file sets out the intracompany transactions of the local enterprise(s). These documentation obligations apply for financial years commencing on or after 1 January 2016. Companies established in the Netherlands that form part of a multinational group with a consolidated turnover of at least EUR 50 million in the previous year must draw up an OECD-based master and local file for transfer pricing and branch profit documentation purposes. These files must be present in the records at the latest on the last day for submitting the return (after any extension granted) for the relevant year.

Tax Declarations
The corporate income tax declaration must be submitted to the tax authorities as a rule within 5 months of the end of the company’s financial year. If a firm of accountants submits the return, a postponement scheme applies. The ultimate deadline for filing, including extension, is 16 months after the end of the financial year.

Corporate Income Tax Rate (%)16.5% – 21.7%
Branch Tax Rate (%)Subject to conditions
Withholding Tax Rate:
Dividends – FrankedUsually 15% or 0%Dividend Tax
Companies often pay out profits to the shareholders in the form of dividends. The following are further examples of dividend situations:

  • Partial repayment of the moneys paid-up on shares by shareholders.
  • Liquidation payments above the average paid-up equity capital.
  • Bonus shares from profits.
  • Constructive dividend. This concerns payments made by a corporation primarily for the benefit of a shareholder as opposed to the business interests of the corporation.
  • Interest payments on qualifying hybrid debt, as such debts are treated as informal equity of the borrowing company.

Up to 2018, cooperatives were, in principle, not obliged to deduct dividend tax on profit distributions to a holder of a membership right, unless the main objective or one of the main objectives of the membership of the cooperative is to avoid dividend tax or foreign tax and the chosen structure has not been set up for business reasons that reflect the economic reality. This anti-abuse regulation was replaced with effect from 1 January 2018 by the introduction of a more generic dividend tax obligation for qualifying holder cooperatives established in the Netherlands. These are holder cooperatives established in the Netherlands whose actual work includes at least 70% holder work in the year preceding the profit distribution. Moreover, the deduction of dividend tax only concerns membership rights that give a right to at least 5% of the annual profit or profit on liquidation, irrespective of whether this entitlement falls independently to the holder of the membership right or in combination with the rights of associated persons or the cooperating group.

No tax is withheld, among others, in the following situations:

  • Where, in inland relationships, benefits are enjoyed from the shares, profit-sharing certificates and cash loans of participations to which the participation exemption applies.
  • If a Dutch company pays out dividends to a company established in a member state of the European Union/EER and the participation exemption would have been applicable where the shareholder was a resident in the Netherlands.

As of 2018, the exemption has been extended to qualifying dividends paid to residents (for tax treaty purposes) in a state with which the Netherlands has concluded a tax treaty including a dividend provision:

  • The dividend withholding tax exemption is subject to anti-abuse regulations, which entail that the beneficiary of the dividend should not be considered to hold the interest in the distributing entity with the main purpose to avoid taxation with another entity or individual (subjective test) and the arrangement transaction should not be considered artificial (objective test).
  • In addition, several specific provisions have been introduced in case the shareholder of the Dutch entity is a hybrid entity. If the withholding tax exemption applies to the distributing entity, the tax authorities should be notified of this within one month after payment.

Step-Up Tax Basis of Cross-Border Legal Merger and Division
In the case of a cross-border merger or division, an unintentional Dutch dividend tax claim on foreign profit reserves may arise. To prevent this, under certain conditions the value of the assets that are transferred as a result of a legal merger or division to the acquiring corporate body in the Netherlands is regarded as (untaxed) paid-up capital for dividend tax purposes. This does not apply for assets that consist of shares in a Dutch corporate body.

Refund Scheme for Foreign Taxpayers
The law includes a provision that provides for a refund scheme for dividend tax for foreign taxpayers (natural person or a legal entity). For foreign taxpayers with a holding in Dutch shares under certain conditions it is possible to request a refund of dividend tax deducted. The shareholder must qualify as beneficial owner of income from shares for which a foreign taxpayer exists. A refund is possible where the dividend tax is higher than the income or corporation tax that would be payable if the relevant taxpayer had been resident or established in the Netherlands. Refund of dividend tax is not granted if the foreign taxpayer is entitled to a full offset of the Dutch tax in the state of residence or establishment based on a tax treaty signed between the Netherlands and the relevant state of residence or establishment.

Tax Rate
The tax rate for dividends is 15% (2020). The tax is withheld by the company that pays out the dividends who pays it to the tax authorities. The dividend tax withheld serves as an advance tax payment on income and corporate income tax.

The Netherlands has signed tax treaties with various other countries, as a result of which a lower tax rate will apply in many instances.

Dividends – Unfranked25% – 0%. Usually 15% or 0%
Dividends – Conduit Foreign Income25% – 0%. Usually 15% or 0%
InterestUsually 0%. In future potentially withholding tax.
Royalties from Intellectual PropertyUsually 0%. In future potentially withholding tax.
Fund Payments from Managed Investment Trusts
Branch Remittance Tax
Net Operating Losses (Years)
Carry Back1 Year
Carry Forward6 Years

Individual Tax Summary


Income tax
Income tax is a tax levied on the income of natural persons with domicile in the Netherlands (domestic taxpayers). They are taxed on their full income wherever it is earned in the world. Any natural person who is not domiciled in the Netherlands, but earns an income in the Netherlands, is liable to pay income tax on Dutch source income (foreign taxpayers). Foreign taxpayers may be eligible for the status of ‘qualifying foreign taxpayer’ if at least 90% of their world income according to Dutch assessment principles is taxable in the Netherlands. This status gives an entitlement to the same deductions as applicable for domestic taxpayers, such as the own home scheme discussed below. One of the conditions is to submit the annual report on non-Dutch income using an income return form signed by the tax authority of the country of residence.

In principle, income tax is charged on an individual basis: married persons, registered partners and unmarried cohabitants (under certain conditions) can, however, mutually distribute certain joint income tax components.

Basis of Taxation

Tax Base
Income tax is charged on all taxable income. The different components of taxable income are broken down into three ‘closed’ boxes; each at a specific tax rate.

Each source of income can only be entered in one box. A loss in one of the boxes cannot be deducted from a positive income in another box. A loss generated in Box 2 can be deducted from a positive income in the same box in the previous year (carry back) or in one of the 9 subsequent years (carry forward). The carry forward period of 9 years has been reduced to 6 years for 2019 and following years. Where a loss in Box 2 cannot be compensated, the tax law offers a contribution in the form of a tax credit. This means that 25% of the remaining loss is deducted from the tax burden payable, on condition that no substantial interest exists in the current tax year and the previous year. The tax credit amounts to 25% of the remaining loss. A loss in Box 1 can be deducted from a positive income in the same box in the 3 preceding years or in one of the subsequent 9 years. Box 3 does not recognise a negative income.

Box 1: Taxable Income from Work and Home

The income from work and home is the sum of:

  • Profit from business activities.
  • Taxable wages.
  • The taxable result of other work activities (e.g. freelance income or income from assets made available to entrepreneurs or companies).
  • Taxable periodic benefits and provisions (e.g. alimony and government subsidies).
  • The taxable income derived from the own home (fixed amount reduced by a deduction equivalent to a specified interest paid on the mortgage bond).
  • Negative expenditures for income provisions (e.g. repayment of specific annuity premiums).
  • Negative personal tax deductions.
  • The following allowances apply to the above-mentioned income components:
    • Expenses for income provisions (e.g. premiums paid for an annuity insurance policy or a disability insurance).
    • Personal deductions. This concerns costs related to the personal situation of the taxpayer and his family that influence his ability to support himself and his dependents (e.g. medical expenses, school fees and specific living expenses for children).

A non-resident taxpayer who performs the function of director or member of the supervisory board of a body established in the Netherlands is always deemed to have performed this function in the Netherlands either using a permanent Dutch establishment, or by virtue of a Dutch employment relationship or a result obtained in the Netherlands from other work. In this way the scope of the tax levy for foreign taxpayers is extended, barring the effect of a tax treaty on Dutch tax jurisdiction.

For the supervisory director and the non-executive member of a one-tier board more or less comparable with them, their working relationship is not regarded as employment and is not therefore subject to wage tax. However, a tax obligation for income tax does apply for their respective income.

The tax rate in Box 1 is progressive and can accumulate to a maximum of 49.50% (2020).

Profit from Business Activities
A natural person who derives income from business activities qualifies for tax allowances for entrepreneurs under certain circumstances. The tax allowances for entrepreneurs include self-employed allowance, research and development allowance, tax deductible retirement allowance (FOR Allowance), discontinuation allowance and SME allowance. In addition, a starting entrepreneur is also entitled to a start-up allowance.

The SME allowance (MKB-winstvrijstelling) means that entrepreneurs will be entitled to an additional exemption of 14% (2020) of the profits following deduction of the above entrepreneur’s allowance (tax allowances). The tax advantage of this and the tax allowances for entrepreneurs mentioned above will, with effect from 2020, effectively be limited by the new rate structure and phasing out of allowances discussed below.

The fiscal profit concept in income tax is virtually identical to the profit concept in corporation tax. For example, the provisions discussed under Corporation Income Tax relating to the valuation of work in progress and orders in progress, arm’s length principle, limited depreciation on buildings, arbitrary depreciation and WBSO (see under section 4) apply accordingly.

Private House and the Own Home Scheme (Eigenwoningregeling)
A private house is viewed as the complete unit of the house with the garage and other buildings on the property. Houseboats and caravans are also viewed as private houses. The only condition being that they are permanently bound to a single address.

A private house is only considered as such where the house is owned by the occupant (taxpayer) and where it serves as permanent domicile and not as temporary domicile. The purchase of a private house is subject to transfer tax of 2%.

Once it has been determined that a house can be viewed as an ‘Own Home’, the house automatically qualifies for tax purposes for the Own Home Scheme based on Box 1 (Work and Home: maximum tax rate 49.50%).

The Own Home scheme works as follows: The fixed sum assumed by the legislator for the enjoyment derived from the own home is expressed for tax purposes in the Own Home fixed sum. The Own Home fixed sum is determined on the basis of a fixed percentage of the value of the house in question. The basis for determining the value of the Own Home is the value of the property, as determined on the basis of the WOZ value. The WOZ value is determined by municipal decree. Certain costs such as financing costs (for example interest paid on the mortgage) are, under certain conditions, deductible from the above-mentioned Own Home fixed sum. The financing costs (including interest paid on a mortgage bond) are tax deductible where the loan qualifies as an Own Home debt. The tax deduction is restricted to mortgages with a minimum annuity repayment scheme of 30 years. In other words, to qualify for tax deduction the mortgage scheme should guarantee full mortgage payment within 30 years or less.

The Own Home financing costs are tax deductible at a tax rate of up to 46.00% (2020; 49.00% in 2019). Starting in 2014, the tax deduction of Own Home costs is being reduced in stages.

New Rate Structure and Phasing Out of Allowances
The government introduced a new rate structure in income tax and payroll tax starting in 2020. Now there is a two-tranche rate; a basic rate of 37.35% (for an income up to EUR 68,507) and a maximum rate of 49.50%. On the other hand, a further phasing out of allowances is coming into effect. From 2020, there will be a reduction of 3% per year over 4 years in the maximum deduction rate of virtually all allowances (including Own Home financing costs and entrepreneur’s allowances) to the basic rate of 37.35%.

Box 2: Taxable Income from Substantial Interest
Substantial interest applies where the taxpayer, with or without his partner, is a direct or indirect holder of a minimum of 5% of the issued capital in a company of which the capital is distributed in shares. The income from substantial interest is the sum of the regular benefits and/or sales benefits reduced by deductible costs. Regular benefits include dividend payments and payments on profit-sharing certificates. Sales benefits include the gains or losses on the sale of shares. Examples of deductible costs include the following: consultancy fees and the interest on loans taken out to finance the purchase of the shares.

A non-resident taxpayer is subject to tax for income from substantial interests if the interest is held in a company residing in the Netherlands. If this company was resident in the Netherlands for a minimum of five years in the past ten years, the company is regarded to be resident in the Netherlands.

The tax rate in Box 2 is 26.25% (2020). According to government plans, the rate will be increased in stages in the coming years, namely to 26.9% in in 2021.

Box 3: Taxable Income from Savings and Investments
Box 3 charges tax on the taxpayer’s assets. The taxable base is based on a fixed return on investment of the yield base. The yield base is the difference between the assets and the liabilities. The yield base is determined on 1 January of the calendar year. The reference date of 1 January also applies if a taxpayer does not yet owe any inland tax on 1 January, or if the inland tax obligation ends during the calendar year for reasons other than death.

The assets in box 3 include: Savings, a second house or holiday house, properties that are leased to third parties, shares that do not fall under the substantial interest regime and capital payments paid out on life insurance.

Liabilities in box 3 include: Consumer loans and mortgage bonds taken out to finance a second house. Per person, the first EUR 3,100 (2020) of the average debt is not deductible from the assets.

Untaxed Assets
All taxpayers are entitled to untaxed assets in Box 3 of EUR 30,846 (2020). The amount is intended to reduce the yield base. A fixed return, depending on the assets, is calculated on the amount remaining after deduction of the exemption. Three tranches apply for the fixed return. In the first tranche (after deduction of the tax-free assets of EUR 30,846 for taxable Box 3 assets) up to EUR 72,797 the fixed return is 1.80% (2020). In the second tranche (EUR 72,797 – EUR 1,005,572) the fixed return is 4.22% (2020) and above this the fixed return is 5.33% (2020). These fixed returns are adjusted annually in the light of the statutory returns in prior years. The tax rate is then paid on this return. The tax rate in Box 3 is 30%.

Tax Allowances
Once the due tax has been calculated for each box, certain tax allowances are deducted from those amounts. All domestic taxpayers are entitled to a general tax allowance of EUR 2,711 (2020). The general tax allowance is reduced by 5.672% of the taxable income from work and home exceeding EUR 20,711 (2020), as a result of which the general tax credit may ultimately be zero for an income of EUR 68,507 (2020). Depending on the personal situation of the taxpayer and the actual amount of the annual income, the taxpayer may also be entitled to specific tax deductions.

Advance Tax Payments
Tax is withheld in advance over the course of the tax year for income deriving from work activities and from dividends. Both wage withholding and dividend tax are advance tax payments on income. The withheld amount may be deducted from the income tax due.

Filing Status

Tax Declaration
The income tax declaration for any given tax year must be submitted to the tax authority in principle before 1 April of the next year. If a firm of accountants produces the return an extension scheme applies. This means that the return may also be submitted later in the year.

Personal Income Tax Rates

Taxable IncomeTax Payable – ResidentsTax Payable – Non Residents
Up to EUR 34,7129.7%
EUR 34, 713 – 68, 50737.35%
More than EUR 68,50849.5%

Goods and Services Tax (GST)

Taxable TransactionsValue Added Tax (VAT)
The Dutch turnover or value added tax system is based on Directive 2006/112/EC – the EU’s common system of value added tax (VAT, or ‘BTW’ in Dutch). This means that tax is charged at each and every stage of the production chain and in the distribution of goods and services. Taxable persons (VAT-registered businesses) charge one another VAT for goods and/or services provided. The taxable person that charges the VAT is required to pay the VAT amount to the tax authorities. If a taxable person is charged VAT by taxable person, it is entitled to reclaim this VAT if the taxable person performs VAT taxable activities itself. By doing so, the system ensures that the end user is effectively responsible for paying the VAT. Foreign taxable persons that perform taxed services in the Netherlands are in principle also liable to pay VAT. Those taxable persons, too, will be required to pay the VAT due in the Netherlands and will therefore also be able to claim the VAT invoiced to them by taxable persons. The VAT system entails formal invoicing rules. The rules are determined by the EU Directive on VAT Invoicing rules and implemented by EU Member States in their national VAT Law. As a basic rule, VAT returns have to be filed quarterly. On request or as a ‘penalty’ for late payment, returns may also have to be filed monthly or yearly. For services and goods moving from one EU Member State to another, an intracommunity listing has to be filed. In principle this return also has to be filed quarterly. However, if the threshold (per quarter) of EUR 50,000 for goods is met, monthly returns have to be filed. If a taxable person acquires more than EUR 1,000,000 of goods, or has transferred more than EUR 1,200,000 of goods to other countries per year, Intrastat declarations have to be filed (in principle monthly). All the above returns and declarations help the EU authorities to keep track of goods and services and whether sufficient tax has been paid. It is becoming more common for a Member State to request specific data from another Member State to tax and penalise a taxable person that did not pay tax or did not follow procedures. Data analysis is often the basis for the requests.

Not all goods and services in the Netherlands are subject to VAT. The following services are VAT exempt: medical services, services provided by educational institutions, most banking services, insurance transactions, services performed by sports organisations and property rentals. Taxable persons that provide exempted services are not entitled to charge VAT for their services. In addition, they are also not entitled to deduct the VAT charged to them for goods and services, however there are some exceptions. Taxable persons that perform both VAT liable and VAT exempt services will assign VAT to those specific services on which VAT is due. A specific pro rata percentage may in that case determine the reclaim rate of VAT on general costs.

Capital Goods
The legislation also includes various provisions to limit the VAT deductible. One important provision aims to review VAT on capital goods sold. In the case of tangible capital goods, the deductible VAT must be reviewed for a period of 5 years and for 10 years in the case of immovable goods. This is called ‘the capital goods scheme’ or ‘revision period’. The entrepreneur that reclaimed VAT on such acquisitions needs to re-establish the right to reclaim VAT in each of the revision years. Following the first year of use, 20% or 10% of the reclaim basis is attributed to each year. In the first year, the full amount may have to be revised. The reclaim percentage is usually determined on the basis of the revenue (VAT taxable revenue divided by total revenue) or actual use (square metres, time, etc.). The rules and case law are quite specific and should be closely monitored on a case-by-case basis. To date, this ‘revision period’ does not apply for expensive services. The government has meanwhile launched a proposal to apply this review provision to this category of expenditure as well. No commencement date has yet been fixed. This new measure will mainly be for sectors with relatively large purchases of expensive services, such as the health care, financial and real estate sectors.

The VAT System in the European Internal Market
The European Union has recognised the free traffic of goods, persons, services and capital in the EU. Performances within the European Community are referred to as the intracommunity supply and acquisition of goods and intracommunity services. VAT is charged based on the destination country principle. This means that goods that cross the border to another EU country are taxed in the destination country. The rules strongly differ for business to business and business to consumer activities.

Digital Services
Digital services (communication, broadcasting and electronic services) are taxed in the country where the customer is resident. It is not relevant whether or not the customer is (a business) registered for VAT. To facilitate the administration of this, the ‘Mini One Stop Shop Scheme’ has been introduced. This scheme offers the business registered for VAT the option to declare the VAT in one EU Member State for the digital services provided to private customers in all Member States. Note that taxable persons supplying digital B2C services in general need two separate and non-contradictory pieces of evidence to determine where their customers reside (billing address, IP address, bank details, etc.). As of 1 January 2019, additional simplifying rules have been implemented for taxable persons providing digital services, specifically electronic services:

  1. Taxable persons supplying B2C electronic services in the EU with a turnover under EUR 10,000 may apply the VAT rate applicable in their own Member State.
  2. The MOSS scheme can also be used, unlike previously, by taxable persons that are not established in the EU, nor have a fixed establishment.
  3. Taxable persons using the MOSS scheme may apply the invoicing rules of their own Member State instead of the customer’s Member State.
  4. Taxable persons supplying B2C electronic services in the EU with a turnover under EUR 100,000 can determine the residence of their customers with one piece of evidence.

The other (larger) part of the e-commerce proposals related to distance sales of goods should be implemented as of 1 January 2021. These proposals will have a major impact on EU and non-EU suppliers of goods to private consumers, as well as on market places facilitating such supplies.

VAT Deferment
The Netherlands has implemented a so-called deferment system which offers cash-flow advantages. The system’s benefit involves payment of VAT being moved from the time of import to when the company declares taxes, usually monthly. The VAT due for the import will be recorded in the declaration as payable, while at the same time, amounts will be subtracted as pre-paid taxes. To obtain this deferment, the importer must apply for a license from the tax department. To obtain this license the company (importer) has to be registered for VAT in the Netherlands as a domestic taxable person or as a foreign taxable person with a fiscal establishment for VAT in the Netherlands. In addition the company (importer) should have regular imports to the Netherlands and the bookkeeping is subject to specific requirements.

It is also possible to appoint a fiscal representative to make use of the deferment licence. In some cases it is even mandatory to use a fiscal representative.

Tax Rates
The general VAT tax rate is 21%. The Netherlands also has a low VAT rate of 9%. Goods and services falling under the low tax rate are specified in Table 1 of the Turnover Tax Act (Wet op de omzetbelasting 1968). This applies, among other things, to foodstuffs, medicines and services in the leisure and hospitality area. The zero rate is mainly intended for goods exported outside the EU and for goods exported to other EU Members States.

Filing and Payment

Other Taxes Payable

Payroll TaxWage Tax
As explained earlier, wage withholding tax is an advance tax payment on income tax. Anyone deriving an income from employment in the Netherlands is liable to pay income tax on that income. In addition, employees in the Netherlands are generally covered by social security. The employer withholds the social security premium and wage tax due from the wages as a single amount and subsequently pays this to the tax authorities. The combined amount is referred to as wage tax. The wage tax is subsequently settled against the amount of income tax due.

Withholding Obligation
The Wage Tax Act links the withholding obligation with the presence of an employment relationship, whether or not a notional one. One of the characteristics of an employment relationship is the employer-employee relationship. With the big increase in the labour market of freelancers and self-employed sole traders (ZZP), the importance of delimiting ‘whether or not’ there is an employment relationship and the associated withholding obligation and social security obligation has grown considerably. To this end, the law on the Deregulation of the Assessment of Employment Relationships (DBA ) was adopted and formally came into force in 2016. The government devised the DBA to replace the Declaration of Independent Contractor Status (VAR). The VAR in principle indemnifies the client from the risk of a withholding obligation. Under the DBA the client can only still get indemnification for the absence of a withholding obligation when using the (model) agreements assessed and approved by the tax authority. However, because of the apparent social impact and the implementation problems for this law, the habituation period has been extended repeatedly. Meanwhile the government has decided to replace the current DBA with the aim of bringing in new measures in 2021. Until then the DBA remains in force. Enforcement of the law (i.e. imposing penalties and retrospective assessments) is only aimed at malicious parties and serious cases. As regards the function of supervisory director or non-executive member of a one-tier-board, the income tax section above has already stated that for both relationships from 2018 there will no longer be a fictitious employment relationship and corresponding withholding obligation. There will, however, still be the option via opt-in regulation to create or maintain an employment relationship, for example in the case of a non-executive board member who qualifies for the 30% scheme discussed below.

Tax Rate
The wage tax rates in 2020 are:

  • On the first EUR 34,712 of taxable income: A percentage of 37.35% is withheld (9.70% wage tax and 27.65% social security premium).
  • On the next EUR 33,795 of taxable income: A percentage of 37.35% (37.35% wage tax).
  • On all additional income: A percentage of 49.50% is withheld.

When withholding the wage tax, the employer must also take into account the general tax allowance and the labour allowance. The latter discounts are discussed above.

Taxable Wage
Wage tax uses a broad definition of wage. Dutch tax legislation allows numerous options for rewarding personnel in fiscally friendly ways. Wage tax is calculated on the full value of the remunerations received by the employee based on the employment contract. The remuneration may take the form of cash, such as a salary, holiday allowances, overtime, commissions and payments for a thirteenth month. Employees can however also receive remuneration ‘in kind’, such as products from the company or holiday trips. The concept of remuneration also includes various other claims, compensations and provisions.

All compensations and provisions from the employer to the employee form the taxable wages. Exceptions to this are:

  • Fringe benefits (e.g. care in case of illness).
  • Intermediary costs, i.e. costs incurred by the employee on behalf and for the account of the employer.
  • Exempt claims and benefits (e.g. pension claims, benefits on death, travel allowance).

Other compensations and provisions in principle form part of the taxable wage. Depending on the category of the compensations and provisions, the employer has the option to include compensations and provisions in the final levy payment. Wage tax is then paid by the employer.

Work Expenses Scheme
Compensations and provisions to employees are subject to the work expenses scheme. Through this scheme an employer may in 2020 spend a maximum of 1.7% of the total wage for tax purposes (the ‘free scope’) up to a total wage bill of EUR 400,000 and 1.2% of the additional wage bill on untaxed compensations and provisions for employees. On the amount above the free scope, the employer pays wage tax in the form of a final levy of 80%.

Not all compensations and provisions are or can be included in the free scope. Under the work expenses scheme, compensations and provisions are only included in the free scope and successively qualify as final levy payment (taxed at 80%) where and insofar as the compensations and provisions do not belong to the following categories:

  1. Compensations and provisions that are exempted from final levy payment.
    This includes among other things the private use of a company car, company bike and reimbursement of fines.
  2. Compensations and provisions belonging to another final levy payment.
    This category includes, for example, gifts and provisions to a third party and additional assessments not recovered from the employee.
  3. Specific exemptions of work expenses.
    Exempted work expenses include compensations and provisions for business travel expenses by public transport (100% compensation), travel expenses by own transport (max. EUR 0.19 per km), course costs, study and training, meals during overtime and business travel (see below), extraterritorial costs (e.g. 30% rule; see below), costs of tools and ICT equipment (see below) and products from the company’s own sector (see below). For some of the specific exemptions a lump sum applies (see below).
  4. Provisions to be valued at zero.
    This includes provision of work clothing, provisions in the workplace, refreshments provided in the workplace.

If and insofar as compensations and provisions do not fall under the above-mentioned exemptions, the employer then has the choice of regarding the (remaining) compensations and provisions as final levy payment or as regular wage (with the deduction of wage tax from the employee). The employer may indicate compensations and provisions as a component of final levy payment on condition that these do not differ substantially from what is usual in similar circumstances. This means that depending on the nature, it is usual to indicate the relevant compensation or provision as a component of the final levy payment. A compensation or provision relating to costs incurred by the employee in relation to the proper exercise of the employment relationship will be qualified as usual rather than the indication of pure salary elements, such as bonuses. With regard to the scope of the compensation or provision, this may not be substantially (30% or more) higher than are indicated as usual in comparable circumstances. The additional amount shall be included in the levy as regular wage. For some work expenses such as meals at the workplace, which are taxed by the employer as regular wage, additional different lump sum valuations apply.

The final levy payment is then first deducted from the free scope and the additional amount taxed by the employer at 80%.

Group Scheme
The final levy under the work expenses scheme is in principle calculated per employer. There is the option to calculate the final levy at group level. For an employee who works for more than one group member, groups no longer have to calculate the compensations and provisions per group member (employer). In addition, under this scheme the use of the free scope can be optimised for all group members by paying all compensations and provisions designated as final levy payment from the total free scope. The final levy payable on the total amount that exceeds the collective free scope is then paid by the group member with the highest pay taxed for the employees.

Tools and ICT Equipment
Compensations and provisions relating to this equipment are exempt if they meet the ‘necessity criterion’. This means that the exemption applies if, in the opinion of the employer, the compensation or provision is necessary for proper performance of the work. The costs must be paid by the employer without being charged on to the employee. In addition the employee must return the equipment or pay the employer the residual value once the equipment is no longer necessary for the work.

Company Products
Employers are entitled to offer their employees discounts or compensation for purchasing products produced or manufactured by the company. This can be done tax-free subject to the following conditions:

  • These must be products that are not from another sector.
  • The maximum discount or compensation per product must be 20% (2020) of the market value (including VAT) of the product.
  • The total value of the discount or compensation may not exceed EUR 500 (2020) per calendar year.

This may also extend beyond the termination of the employment contract due to disability or retirement.

If an employee is required to relocate for work purposes, the employer is entitled to compensate the employee free of tax for the moving costs for his household goods. In addition, the employer may provide a tax-free moving expenses allowance of a maximum of EUR 7,750 (2020). The condition is, however, that this is a move that is entirely related to the employment. This in any case applies if the employer provides the allowance within 2 years after the employee accepts the new employment (or after transfer) and the employee lives more than 25 kilometres from his work and moves, as a result of which the distance between his new home and his work is reduced by at least 60%.

The 30% Ruling
Foreign employees who come to work in the Netherlands temporarily qualify for the 30% ruling under certain circumstances. The ruling provides that the employer is entitled to pay the employee a tax-free remuneration to cover the extra costs of their stay in the Netherlands (extraterritorial costs). The compensation amounts to 30% of the salary, including the compensation, or 30/70 of the salary excluding the compensation. The condition is that, based on this salary, the employee is not entitled to prevention of double taxation. If the employer reimburses more than the maximum amount, this salary is subject to wage tax. The employer may deduct a final levy on this additional amount. Since 1 January 2019 the disposition is only valid for a maximum period of 5 years. Up until 2019 this was 8 years. A transitional ruling applies for employees who already used this scheme before 2019. For this group, the change comes into effect on 1 January 2021.

Conditions for Qualification for the 30% Ruling

  1. The employee is hired from abroad.
  2. The employee has a specific expertise that is scarce or not available at all on the Dutch employment market. This is called the scarcity and expertise requirement. For this specific expertise, the legislator has introduced a salary norm.
  3. In the 24 months preceding the first working day in the Netherlands, the employee has lived more than 150 km from the Dutch border.

An employee is regarded as fulfilling the conditional specific expertise if the employee’s remuneration exceeds a defined salary standard. The salary standard is indexed annually. For 2020 the salary standard is fixed at a taxable annual salary of EUR 38,347 (2019: EUR 37,743) or EUR 54,781 including the 30% allowance (2019: EUR 53,918). This salary standard of EUR 38,347 (2020) is excluding the final levy components and thus excluding the 30% allowance. In most cases, no more specific check is made for scarcity, but this is done if, for example, all the employees with a particular expertise meet the salary standard. The following factors are then taken into account:

  • The level of the training followed by the employee.
  • The experience of the employee relevant for his job.
  • The pay level of the present job in the Netherlands in relation to the pay level in the employee’s country of origin.

For scientists and employees who are physicians in training as specialists there is no salary standard. For employees coming in who are aged under 30 years and have completed their Master’s degree, there is a reduced salary standard of EUR 29,149 for 2020 (2019: EUR 28,690) or EUR 41,641 (2020) including the 30% allowance.

The 30% ruling contains a rule on post-departure remuneration. As a result, the 30% ruling also applies effectively until the end of the wage tax period that follows the wage tax period in which the employment has ended.

150 Kilometre Limit
The 30% rule only applies if the incoming employee can substantiate that the employee has lived for a minimum period of two thirds of 24 months (i.e. 16 months) outside the 150 kilometre area from the Dutch border prior to the start of the employment in the Netherlands.

Extraterritorial Costs
Extraterritorial costs consist, among others, of the following:

  • Extra cost of living because of the higher cost of living in the Netherlands than in the country of origin (cost of living allowance).
  • The cost of an introductory visit to the Netherlands, with or without the family.
  • The cost of the application for a resident’s permit.
  • Double housing costs (for example hotel costs) because the employee will continue his or her residence in the country of origin.

The following aspects are not covered by the extraterritorial costs and can therefore not be compensated or granted untaxed:

  • The overseas posting allowance, bonuses and comparable compensations (foreign service premium, expat allowance, overseas allowance).
  • Loss of assets; the purchase and sale of a house (reimbursement of house purchase expenses, agent’s fee).
  • Compensation for higher tax rates in the Netherlands (tax equalisation).

If the employee has children, the employer is entitled to offer the employee tax-free compensation for school fees at an international school in addition to the 30% ruling. Other professional costs can be compensated untaxed based on the normal rules applicable to the Wages and Salaries Tax Act (Wet op de loonbelasting).

If the extraterritorial costs add up to more than 30%, then the actual costs that have reasonably been incurred can also be compensated tax-free. It must however be possible to demonstrate that the costs incurred are justifiable.

To be able to make use of the 30% ruling, the employer and the employee must jointly submit an application to the Foreign Office of the tax authorities in Limburg (Belastingdienst/kantoor Buitenland). If the application is approved, the tax authorities will issue a decision.

The decision is valid for a maximum period of 5 years (8 years until 2018). Should the request be made within 4 months after the start of employment as an extraterritorial employee by the employer, the decision shall be retroactive to the start of employment as an extraterritorial employee. If the request is made later, the decision shall apply starting the first day of the month following the month in which the request is made. The five-year period is reduced by previous periods of stay or employment in the Netherlands.

In addition, the employee with the 30% ruling can also submit an application for registration as a partial foreign taxpayer for tax purposes in the Netherlands. This means that they will be entered as a foreign taxpayer in Box 2 and 3. In that case, as a foreign taxpayer, the income to be reported is limited to Dutch source income and not the worldwide (investment) income.

Stamp DutyMain rule 6% – 2%

Housing – exemptions possible

Land TaxSubject to conditions

Prevention of Double Taxation
Residents of the Netherlands and companies that are registered in the Netherlands must pay tax on all revenue generated worldwide. This could result in any given income component being taxed both in the Netherlands and abroad. To prevent this kind of double taxation, the Netherlands has signed tax treaties with many other countries. The treaties are largely modelled on the OECD Model Treaty for the prevention of double taxation.

If an income tax component is nevertheless double-taxed as income or corporate income tax, the taxed amount is reduced based on the exemption method. The method entails the reduction of the Dutch tax related to the foreign income. The exemption on the income tax is calculated per income tax box.

Double taxation of dividend payments and interest payments and royalties is prevented with the use of the settlement method. The use of this method means that the Dutch tax is reduced by the amount of tax charged abroad.

In certain situations it is also possible to deduct the foreign tax directly from the profits, or as costs related to income.

In 2017 the government signed the multilateral treaty on international tax evasion (Multilateral Instrument or MLI). This treaty is a result of the BEPS project against tax avoidance. This treaty offers the opportunity to implement measures against tax evasion in one go, without the need for separate negations and also provides for faster mutual agreement procedures. The MLI bill came into effect as of 1 July 2019.

Last updated: 01.07.2020