Netherlands Corporate Tax Guide (Vennootschapsbelasting)

Corporate Tax Rates (2026)

• First bracket: 19% on taxable profit up to €200,000. This reduced rate makes the Netherlands highly competitive for small and medium-sized enterprises (SMEs). The bracket threshold has been stable at €200,000 since 2021.
• Second bracket: 25.8% on taxable profit exceeding €200,000. The rate was increased from 25.0% to 25.8% in 2025 as part of the corporate tax reform package. The blended rate for a company earning €500,000 is approximately 23.0%.
• Innovation box (innovatiebox): Qualifying income from self-developed intangible assets is taxed at an effective rate of 9% (2026). This is one of the lowest IP tax rates in Europe, making the Netherlands a leading jurisdiction for IP holding and development. See the innovation box section below for qualifying criteria.
• Taxable base: The corporate tax base is calculated under Dutch GAAP (Titel 9 Boek 2 BW) with tax-specific adjustments. Key adjustments include: non-deductible expenses (fines, certain donations), participation exemption results, innovation box deductions, and transfer pricing adjustments.

Participation Exemption (Deelnemingsvrijstelling)

• Broad exemption: Dividends and capital gains from a qualifying shareholding (deelneming) are fully exempt from Dutch corporate tax. The exemption applies to both dividend income and capital gains on disposal, making the Netherlands a very attractive holding company location.
• Threshold: A qualifying participation requires at least 5% of the nominal issued share capital (or equivalent for non-share entities) in a subsidiary. The 5% threshold applies to both direct and indirect holdings. Portfolio holdings below 5% are not exempt and are subject to standard corporate tax (capital gains/losses recognised).
• Subject-to-tax test: The subsidiary must be subject to a profit tax (heffing van belasting) in its country of residence. This is a low threshold — almost any corporate income tax regime satisfies the test. The test is met even if the subsidiary operates at a loss (and pays no tax) — the requirement is that a tax exists, not that it is actually paid.
• Asset test (anti-mismatch): If the subsidiary is a passive investment vehicle (e.g., a holding company), the participation is exempt only if the subsidiary's assets consist of no more than 50% passive low-taxed free assets (vrije beleggingen — shares, bonds, cash held as passive investment). This anti-abuse rule targets the use of Dutch holding companies for passive asset sheltering. The test is applied at the subsidiary level, not the group level. A subsidiary that is itself an operating company passes automatically.
• Holding company structuring: The participation exemption makes the Netherlands a preferred jurisdiction for European holding companies (e.g., for US, UK, or Asian groups acquiring EU subsidiaries). The exemption covers both upstream and downstream participations. Cross-border mergers and demergers under the EU Merger Directive may also qualify for tax neutrality.

Innovation Box (Innovatiebox)

• 9% effective rate: Qualifying IP income is taxed at an effective rate of 9%. This is achieved by deducting a notional amount from the taxable base — the deduction equals the difference between the normal corporate tax rate and 9% on qualifying IP income. The box applies to both licence income and capital gains from the sale of qualifying IP.
• Qualifying IP: Self-developed intangible assets for which a patent has been granted or that qualify as R&D work statements (S&O-verklaringen) from the Netherlands Enterprise Agency (RVO). Software, pharmaceutical patents, biotechnology inventions, and process innovations are common qualifying assets. The IP must be developed by the Dutch taxpayer — acquired IP does not qualify for the innovation box (unless further developed to the "qualifying" level).
• Nexus ratio: The benefit is limited by the nexus ratio under the OECD modified nexus approach. Qualifying income is limited to the ratio of qualifying R&D expenditure to total R&D expenditure: (Qualifying R&D expenditure + 30% uplift) / (Total R&D expenditure) × IP income. The 30% uplift is capped at the total qualifying expenditure — ensuring that the nexus ratio never exceeds 100%. Outsourced R&D to related parties and acquired IP costs are excluded from the numerator.
• Interaction with WBSO: The Dutch R&D incentive (WBSO — Wet Bevordering Speur- en Ontwikkelingswerk) provides a reduction in payroll tax (loonheffing) for R&D employee wages. The WBSO subsidy does not reduce the innovation box benefit — both incentives can be used simultaneously. The WBSO-reduced wages are included in the R&D expenditure for the nexus ratio at their gross amount (before WBSO reduction).

Fiscal Unity (Fiscale Eenheid)

• Group consolidation: A Dutch parent company and its wholly-owned (≥95%) Dutch subsidiaries may form a fiscal unity (fiscale eenheid) for corporate tax purposes. The group is treated as a single taxpayer — intra-group transactions are eliminated, losses of one company offset profits of another, and no transfer pricing documentation is required for intra-group transactions within the unity.
• Eligibility: The parent must hold at least 95% of the shares in the subsidiary (both legal and economic ownership). Both entities must be established under Dutch law and resident in the Netherlands. Branches of foreign companies generally do not qualify. The parent and subsidiary must have the same financial year.
• Application: The fiscal unity is requested through the Belastingdienst using the online application form. Once granted, the unity applies from the beginning of the financial year. The application is typically processed within 4–8 weeks. The unity continues until it is terminated (by the taxpayer or by the tax authorities) or until the 95% threshold is no longer met.
• Cross-border fiscal unity (abolished): The Netherlands cross-border fiscal unity was ruled incompatible with EU law by the CJEU (X BV case, C-398/16) and was abolished for new arrangements from 2021. Existing cross-border fiscal unities were terminated as of 2021. Intra-EU group relief is now available through the grensoverschrijdende verliesverrekening (cross-border loss relief) under the EU Merger Directive and domestic implementation provisions — but this is limited and subject to strict conditions.

Interest Deductibility and Thin Capitalisation

• Earnings stripping rule (ATAD 1 — renteaftrekbeperking): Net interest expenses (interest costs minus interest income) are deductible only up to the higher of 20% of EBITDA (30% from 2024 under ATAD implementation, reduced to 20% from 2025 as part of general tax base broadening) or €1 million. Disallowed interest can be carried forward indefinitely. This implements the EU ATAD 1 interest limitation rule and applies to all Dutch corporate taxpayers and fiscal unities.
• Thin capitalisation (besmette leningen): Certain shareholder loans (besmette leningen) are reclassified as equity for Dutch tax purposes under the fraus legis doctrine and specific anti-abuse provisions. A loan from a shareholder is reclassified as equity if the loan is (a) subordinated to other creditors, (b) has no fixed repayment schedule or the repayment depends on distributable profits, and (c) is not a typical arm's-length third-party loan. If reclassified, interest payments are treated as non-deductible dividends. This rule is particularly relevant for DGA loans to their own BV.
• Hybrid mismatches (ATAD 2): The Netherlands has implemented ATAD 2 rules denying deductions for payments that create hybrid mismatches (deduction/no inclusion outcomes under different tax classifications of entities or instruments). This affects Dutch companies in cross-border financing structures — dual-resident entities, hybrid loans, and hybrid entity mismatches are targeted.

Dividend Withholding Tax

• Standard rate: Dutch dividend withholding tax (dividendbelasting) is levied at 15% on dividend distributions by Dutch-resident companies. The tax is withheld by the company and remitted to the Belastingdienst.
• Exemptions (withholding tax exemption): Certain shareholders may be exempt: (a) EU resident corporate shareholders with ≥5% holding — the EU Parent-Subsidiary Directive provides a full exemption; (b) Dutch resident corporate shareholders — exempt under the participation exemption (effectively a zero rate on distributions within the fiscal unity or to a Dutch parent); (c) third-country resident corporate shareholders — may qualify for exemption if the shareholding meets the subject-to-tax and asset tests under the Dutch withholding tax exemption (conditionele bronbelasting is not relevant for dividends — this is about the dividend withholding tax exemption for qualifying holding structures). The Dutch government introduced a conditional withholding tax on interest and royalties from 2021 to low-tax jurisdictions and non-cooperative jurisdictions — this applies to intragroup payments, not dividends.
• Credit for shareholders: Dutch resident individual shareholders (box 2) can credit the 15% dividend withholding tax against their box 2 income tax liability (24.5–31%). Non-resident shareholders may claim a reduction under the applicable tax treaty (typically 0–15% depending on the treaty and holding percentage).
• Dividend stripping anti-abuse: The Netherlands has specific anti-dividend stripping rules (dividendstripping) targeting transactions where the economic ownership of shares is temporarily transferred around the dividend payment date to obtain a withholding tax credit or refund to which the true owner is not entitled. The penalty is 100% of the tax avoided plus a fine.

For starting a BV in the Netherlands, see our Starting a Business Guide →. For the DGA remuneration rules and box 2 taxation, see our Personal Tax Guide →. For cross-border mergers and acquisitions, see our Cross-Border M&A Guide → (forthcoming).