Benefits of Locating in the Netherlands
So why the Netherlands? It’s not the largest economy in Europe and certainly not the largest country period. It may not be the first place that may come to mind when deciding where to establish a distribution or operational hub in Europe….but it should be and here’s why:
Location, Location and of course Location……
The Netherlands is strategically located designed to easily service markets within the European Union, Eastern Europe, the Middle East and Africa. As the country has evolved into a premier European gateway it has developed the fourth largest European airport with Amsterdam’s Schiphol and the largest ocean port in Europe in Rotterdam.
Then of course there’s ….Taxation
- VAT Deferment: Normally VAT has to be paid at the time of import. The layout of VAT payments creates a cash flow disadvantage. However, the Netherlands, unlike most other EU Member States, has implemented a VAT deferment system. This allows a company to defer VAT payments, due at import, until time of sale. Since VAT is passed on to the purchaser this results in a zero cash flow payment. And with a 21% VAT rate this is a pretty convincing argument on its own!
- Low statutory corporate income tax rate: 20% for the first €200,000 and 25% after; compared to Germany’s 29.55% plus local tax rates of 7 – 17.4% and France’s 33.3 – 34.3%.
- Ruling Practice: Obtaining an “Advance Tax Ruling” (ATR) or “Advance Pricing Agreement” (APA) are very attractive Dutch tax law features. These policies provides companies certainty about their future tax position. APA provides certainty regarding transfer-pricing issues. The ATR provides certainty of tax liabilities in advance.
- Innovation Box: Companies can benefit from an effective tax rate of only 5% for R&D income from self-developed patented and also from intangible assets.
- Incentive for R&D: The Netherlands provides an incentive for companies that conduct R&D. The incentives are in the form of wage tax and social-insurance contribution of 38% and 14%.
- Wide Tax Treaty Network: Avoidance of double taxation with treaties with over 90 countries These are only some of the great benefits of establishing your business or distribution service within the Netherlands.
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