Is your organization looking for an effective way to avoid double taxation? Do you operate a subsidiary in the Netherlands which answers to a parent company that is registered abroad? If this is the case, your business may be eligible for participation exemption under Dutch tax law.
Participation exemption is a unique form of double tax relief which prevents dividends and capital gains from being taxed twice. If your subsidiary meets the requirements imposed by the Dutch Tax and Customs Administration, any dividend and capital gains or losses may be exempted from corporate income tax.
Do you want to know if your Dutch subsidiary qualifies for participation exemption? Our specialists in Amsterdam can analyze your situation and advise you on any steps you may need to take.
Although there are a number of countries around the world that offer some form of participation exemption, the Dutch tax regime provides several unique advantages not seen anywhere else. The most important advantage is the fact that Dutch participation exemption provides full exemption from corporate income tax, as opposed to partial exemption.
This essentially means that any profits that arise from a qualifying investment held by the subsidiary cannot be taxed. To be eligible for participation exemption, the subsidiary must pass the ownership test and either the motive test, tax subject test or asset test. Should your company fail to qualify for participation exemption, however, there are numerous other methods to lower your overall liability. This makes the Dutch tax regime a uniquely attractive fiscal framework for international companies looking to avoid double taxation.
Figuring out whether your organization qualifies for participation exemption in the Netherlands can be a difficult task. Dutch tax laws and regulations are notorious for their complexity and can be tricky to navigate successfully. Luckily, our team of fiscal professionals can handle these matters for you.
We can analyze your local situation and determine whether you are indeed eligible for participation exemption. If your company passes the test, we can help you arrange your participation exemption quickly and efficiently. And in the event that you fail to meet certain criteria, we can advise you how to make the necessary alterations to your fiscal strategy.