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Denmark-Netherlands Double Tax Treaty

Denmark-Netherlands Double Tax Treaty

The Netherlands and Denmark have signed a treaty for the avoidance of double taxation in 1996, but the document became applicable 3 years later, in 1999. The convention was established in order to eliminate the double taxation of persons and legal entities that are tax residents of the two countries. It takes into consideration a set of income taxes, which can be detailed by our team of accountants in Netherlands

What are the taxes covered by the Netherlands – Denmark treaty?  

The treaty for the avoidance of double taxation signed by Netherlands and Denmark takes into consideration a set of taxes, which are stipulated by the Article 2 of the agreementOur accounting firm in Netherlands can assist on the manner in which the below mentioned taxes are imposed to Dutch and Danish tax residents

  • • the convention is applicable to taxes on income and the taxes on capital available in both contracting states;
  • • the treaty takes into consideration the taxes applicable to the total income, as well as on parts of income, which also refer to the income obtained from movable or immovable property;
  • • under the provisions of the treaty, the Netherlands applies the income tax, the wages tax, the company tax, the dividend tax and the capital tax;
  • • in Denmark, the following taxes are applicable: the income tax to the state, the municipal income tax, the county municipalities income tax, the church tax, the tax on dividends, the tax on interest, the tax on royalties and the taxes applicable under the Hydrocarbon Tax Act

When is a Danish company taxed in the Netherlands?  

Danish company that operates in the Netherlands will be taxed in this country if it carries its business operations through a permanent establishment. A permanent establishment refers to a wide category of business establishments, such as a branch office, an office, a factory, a workshop, but it also takes into consideration construction projects which are carried on the Dutch territory for a continuous period of at least 12 months

The term permanent establishment refers to other types of business activities that can be carried out by Danish tax residents, as prescribed by the Article 5 of the treaty. Persons interested in receiving tax assistance on the provisions of the agreement are invited to contact our Dutch accountants for further details.