Business activities are taxed in a different way from consumer activities. If you run a sole-trader business and are self-employed, the profit generated from your business activity is taxed as income (see Box 1 taxation). Profit generated from a business entity is taxed as profit tax for business (Vennootschapsbelasting or VPB)
Income from business activities
When you or your tax partner start a business, you generally will not start paying income tax or Healthcare Insurance Act (Zvw) contributions on taxable profits from these business activities until you file your income tax return.
After you have submitted your tax return, you will receive an assessment from the Dutch tax office of the income tax and Zvw contributions owing. To avoid having to pay interest charges and a large amount at once, you can apply for a provisional assessment in advance. If you have already had a provisional assessment, you should check it and make any necessary adjustments throughout the year.
If you have shares or profit participation certificates, you need to pay dividend tax on the proceeds. If it is based in the Netherlands, the company that pays those proceeds (dividends) to you must withhold dividend tax and pay this to the Tax and Customs Administration. If a company is based in a different country, different rules can apply. If you have the 30% ruling, there is no Dutch tax liability on your participation in foreign companies.
Dividend tax refund
If you are a foundation, association or other legal entity that is not subject to corporation tax, you can file a digital request for a refund of the Dutch dividend tax that was withheld.
You have to register with the Dutch tax office first. You can do this by sending in the form 'Registreren voor teruggaaf dividendbelasting'. This form can be found in the secure section on the Dutch tax office’s website, and you only have to register once.
Refund or exemption from Dutch dividend tax
Dutch companies withhold tax from the dividend they pay to shareholders. This dividend tax rate is currently 15%. If you live or are established in a country other than the Netherlands and hold shares in a Dutch company, you may be exempted from or receive a refund of Dutch dividend tax.
Refund or exemption?
If you have a full or partial exemption, a company can deduct less or no dividend tax from the dividend to be paid. If you have not requested an exemption, you may request a refund of any excess dividend tax paid at a later date.
Number of shares
Whether you are entitled to an exemption or refund depends on the number of shares you hold in a Dutch company:
- You are considered to have an ‘intercompany dividend’ if you have at least 5% of shares of a company within the EU and the EEA. Different percentages apply to other countries, depending on the tax treaty between the Netherlands and the relevant country.
- If you have fewer shares than this, you are considered to have a ‘portfolio dividend’ (investment dividend).
Foreign bodies exempt from profit tax
If your body is established in the EU or Iceland, Norway or Liechtenstein (EEA) or in a 'third country', you may request a refund of all dividend tax withheld (15%) if you meet one of the following conditions:
- You are established in a country other than the Netherlands.
- You are not subject to profit tax in that country.
- If you were established in the Netherlands, you would not be a subject to corporation tax.
- You do not perform any investment activities.
- You are the beneficial owner of the shares.
If your body is established in a country that is not part of the EU or EEA, you can request a dividend tax refund, if you meet the following conditions in addition to those above:
- The investment is a portfolio dividend.
- The Netherlands has made arrangements on the exchange of information with the country where your body is established.
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