| The sphere of financial affairs in Netherlands is broadly | | | | from participation exemption. Also, in case foreign |
| approachable due to an organization of Dutch taxes in | | | | entity stockholders apply for participation exemption, |
| such a manner that they encourage both national and | | | | they must keep in mind that they must be liable to |
| foreign investment. Subsequently, corporate revenues | | | | taxes and pay their taxes where they holds the |
| are taxed and then the tax (belasting) is dealt with by | | | | stocks; in addition, they must bring proof that their |
| the Belastingdienst, the Dutch taxes and customs | | | | stocks are not maintained as an investment; if the |
| organization established by the Dutch Ministry of | | | | latter situation is proved to be real, then participation |
| Finance in such a way that the intricate paths of the | | | | exemption does not apply. |
| belasting legislation do not interfere with the investors' | | | | Therefore, who benefits from participation exemption? |
| interest. | | | | Basically, if the taxpayer retains at least 5% of the |
| Corporate entities, the same as natural persons | | | | paid-up total value of stock shares issued by a |
| (individuals) who pay an annual income tax, are subject | | | | corporation, and in case his situation does not belong to |
| to another type of income tax, more precisely to | | | | any of the exceptions from participation exemption |
| Dutch taxes on corporate income. Both public | | | | mentioned above, then participation exemption is going |
| companies and private companies which register profit | | | | to apply. Also, the taxpayer can benefit from |
| are answerable to Dutch taxes on corporate income. | | | | participation exemption in the case where he retains |
| Both national corporate entities (which may or may not | | | | less than 5% of the paid-up total value of stock |
| function internationally as well) and international | | | | shares, but title (proprietorship) of the stocks is required |
| corporate entities, which have extensions in the | | | | by the standard management of the corporation. |
| Netherlands and therefore are additionally assimilated | | | | Also, to what concerns tax return on corporate |
| under Dutch law, will be considered as liable to Dutch | | | | revenues, the belasting regulations apply on |
| taxes. The same as natural persons, corporate entities | | | | corporations, both national and foreign. Thus, an annual |
| will be considered either resident taxpayers or | | | | tax return on corporate income must be registered |
| non-resident tax payers according to the location of | | | | with the Belastingdienst in the first semester from the |
| their main offices and to the location of the customary | | | | end of the financial year (which is the regular, calendar |
| board meetings of the stockholders. | | | | year). Also, from the return form the Belastingdienst |
| At the most basic level, the taxable revenues | | | | must be able to extract all the data necessary for |
| registered by a corporate entity throughout a year | | | | establishing the corporate revenues which are liable to |
| (excluding from here deductible deficits) are charged. | | | | Dutch taxes; in consequence, the tax return form must |
| The belasting rate throughout 2006 is a little more than | | | | be filed as accurately and as completely as possible. |
| a quarter, 25.5%, to be precise, from the first 22,689 of | | | | Don't worry; you will not miss filing your tax return, |
| the revenues liable to Dutch taxes, and is approaching | | | | because the Belastingdiest makes certain that every |
| 29.6% for the surplus. As of 2007, the first 22,689 is | | | | corporation is kept up-to-date with its situation |
| ratable at 24.5%, while for the surplus the rate | | | | concerning Dutch taxes. Subsequently, the tax office |
| decreases at 29.1%. | | | | sends letters to taxpayers on a regular basis. |
| A point likely to attract the attention of corporate | | | | As a reminder, the Dutch tax return must be filed with |
| entities is the participation exemption law; this states | | | | the Belastingdienst for each year in which a |
| that none of the revenues derived from stockholdings | | | | corporation has activated in the Netherlands. |
| is liable to Dutch taxes on corporate income. Of | | | | Fortunately, filing the tax return is electronically enabled |
| course, there are certain rules as to who benefits from | | | | for corporations, as a matter of fact, the single way of |
| participation exemption. If the corporate entity | | | | filing tax return to what concerns companies. Also, |
| stockholder is considered a capital spending, therefore | | | | both private and public limited corporations need to |
| an investment body, then he is not going to benefit | | | | register their tax return. |