The corporate income tax return was due June 1 this month. The corporate income tax return basically taxes the income of companies that are vehicles such as the so called BV company or in the Netherlands registered foreign vehicle such as UK Ltd or German GmbH.
Corporate income tax return – Dutch BV company
A Dutch BV company is incorporated by the Dutch notary and the fiscal year is often equal to the calendar year. In the deed of incorporation is stated when the first financial year is ending. That can be December 31 of the year of incorporation, or in case of a first long book year, December 31 of the following calendar year. The difference from our point of view is that you can save a bit on accountancy costs.
Corporate income tax return – Foreign limited liability company
A foreign limited liability company such as a UK Ltd, US inc or German Gmbh are subject to Dutch corporate income tax if they have a permanent establishment in the Netherlands. A permanent establishment is an office the company has in the Netherlands. The company can also become subject to Dutch corporate income tax when a person working for the company is residing in the Netherlands and that person can sign on behalf of the company. Then this so called fixed person of interest causes the company to pay tax in the Netherlands.
Corporate income tax return – Dutch BV company with foreign director
Often a foreign company would like to set up a Dutch BV company. Then upon our request we are informed where the director of this company will be living, and seldom that is a Dutch address. The result is that the Dutch BV company is in fact not a Dutch tax resident, as a company is tax resident in the country where the managing director is living.
Nevertheless that company is obliged to file a Dutch corporate income tax return based on the assumption that all BV companies are to be Dutch tax residents. The taxable income will be nil, as all the income should be allocated to the country where the managing director is living.
The issue can be solved by hiring either a director who is a Dutch tax resident or use the services of a so called Trust Company that will act as if they are the director of your company. But this type of business, the trust business, is very much under attack by the European Union, hence that might not be a solution for the long term.
Corporate income tax return – branch registration
In the even that your foreign company does have an office in the Netherlands, but no director, you can choose to set up a branch registration of the company. Then no director is required to become subject to corporate income tax. The tax base and the tax rates are the same.
Corporate income tax return – Orange Tax Services
We can help you set up your BV company in the Netherlands or if you prefer to set up a branch company, we can assist you as well.
After the setup we can assist you with the filing obligations such as the monthly payroll, quarterly Value Added Tax return, annual corporate income tax return. Feel free to contact us.