Double tax treaties in the Netherlands
The Netherlands has signed a large number of double tax treaties. These bilateral agreements are meant to provide tax relief and avoid the double taxation of income for individuals who derive income both from a Dutch source and from another country.
More than 95 Dutch double tax treaties allow for the avoidance of double taxation and before deciding to do business in the country, investors should be informed about the tax advantages of these treaties, if applicable for their country of origin. Examples of such treaties include the US-Netherlands double tax treaty, the Netherlands-UK double tax treaty and the one signed with the United Arab Emirates.
The experts at our accounting firm in the Netherlands can give you detailed information about the provisions of the double tax treaties signed with your country of origin or another country you are interested in.
Avoidance of double taxation
The double tax treaties help determine which country is entitled to levy taxes on the income produced within its jurisdiction. Individuals who live outside of the country but still derive income from a Dutch source are taxed only once on income and capital according to these treaties.
Accordingly, those individuals who derive income from the Netherlands but live abroad will pay less income tax in the Netherlands. Our accountants can give you more information about the taxation of foreigners in the country, including the 30% ruling for foreign employees.
The importance of the treaties for foreign investors in the Netherlands
The double tax treaties are not only beneficial for individual taxation, they are also valuable for companies that want to open a branch in the Netherlands. According to the provisions of these conventions for the avoidance of double taxation, the two countries agree upon a reduced withholding tax rate for dividends and royalties.
Individuals and companies from countries which have yet to conclude a double tax agreement with the Netherlands can still benefit from a certain degree of tax relief according to the Decree of Double Taxation.