Taxation
It is to your advantage to provide this information at an early stage: new companies which have made investments in their business often receive money back following their first VAT return (Value Added Tax). This is because a new business often pays more VAT in the beginning than it has actually charged. Start-up businesses are regularly visited by an inspector from the Inland Revenue who checks whether the business administration meets the required standards. You can also make an appointment yourself for an 'introductory visit'.
Types of taxation
Businesses may have to deal with four kinds of taxes:
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Value added tax (VAT) It is almost always compulsory for businesses to charge clients VAT (BTW). VAT amounts to 19% for service and premium goods. A VAT percentage of 6% is charged over base goods
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Income tax If the Inland Revenue considers you an entrepreneur, you can benefit from a number of tax allowances, resulting in paying less income tax. This does not apply to a BV (PLC).
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Wages and salaries tax If you employ staff, you will be liable to pay wage tax.
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Corporation tax If you have a private company with limited liability, you will be liable to pay corporation tax.
Corporation tax
If you have chosen a private limited company (BV) as the legal form for your business, you will have to pay corporation tax and dividend tax. Source: Checklist taxaffairs
30% Allowance ruling
The following section describes the nature of the 30% ruling. It is important to realize that this ruling only applies to non Dutch nationals working in the Netherlands. The use of the 30% allowance ruling requires expert guidance as the procedure involves communication with the Dutch Tax and Customs Administration (Belastingdienst).
Value added tax
Businesses are nearly always liable to charge value added tax to their clients. The rate is 6% or 19% depending on the type of product or service. The VAT which you receive from your client must be paid to the Inland Revenue. The VAT which you have paid out yourself to your suppliers can be offset against this. Value added tax is paid either monthly or quarterly, depending on the type of business you have and the level of turnover.
Most businesses are required to charge their customers VAT (value added tax). You will be given a VAT registration number by the Inland Revenue. For businesses which have very little VAT to pay, the Kleine ondernemersregeling (small business allowance) applies: you will then pay less VAT, or none at all.
If you are certain that you are ready for business, you should request the Opgaaf gegevens startende ondernemers form (Data report of starting entrepreneurs) from the Starters' Desk of the Inland Revenue. The Inland Revenue will make a provisional assessment of your business and decide whether to give you a VAT registration number or not.
If the entrepreneur is liable to pay income tax, he can take advantage of a number of tax allowances. If you are an employer, you have to make wage deductions and pay these to the Inland Revenue. Declaration and payment is usually done on a quarterly basis.
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