Personal Income Tax

An entrepreneur that carries on entrepreneurial activities by virtue of a sole proprietorship is subject to personal income tax (PIT). The tax rate varies from 5.85% to 52.00% in 2013. Besides  there is the benefit of the entrepreneur’s deduction (ED). The ED consists in a number of separate elements, such as a profit dependable deduction (SME exemption of 14.00%).

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Corporate Income Tax

The Netherlands’ tax regime has a favourable element to companies; the participation exemption. Due to the large number of tax treaties concluded with other countries, the Netherlands has been attractive to holding companies in the past decades.

Over years the Netherlands has amended the CIT regime. Besides changes to broaden the tax base, the innovation box regime has been introduced. The profit related to the innovation box regime is subject to a tax rate of 5.00%, whereas in 2011 the tax rate amounts to 20%.

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