The Netherlands

    Corporate taxation

    The corporate tax rate is 20% on taxable profit up to EUR 200,000 and 25% for taxable profits exceeding EUR 200,000.

      Special corporate tax incentives

      The Netherlands has offered special tax deals to foreign MNE's resulting in illegal State Aid.
      A patent box referred to as the ‘innovation box’ is also offered. The initial regime from 2007 applied only to income from patents which was taxed at a reduced rate of 10%. In 2010 the regime was expanded to include a much wider range of IP and the tax rate was reduced to 5%. The reduced rate of corporate tax applies to the net positive income derived from the qualifying IP ( gross income minus all related expenses and depreciation).
      The Netherlands plays an important role in the area of international tax avoidance. Oxfam placed the Netherlands as the No. 3 on the list of tax havens of the World. It is the most popular conduit tax jurisdiction among the Fortune 500 MNEs.
      The Netherlands provides MNEs with conduit holding companies serving as hubs/transits for corporate profits and capital to low tax jurisdictions such as Cyprus and Bermuda. MNEs within the IT sector have been known to use a combination of subsidiaries in Ireland, the Netherlands, and Bermuda to reduce their taxes, also known as a “Double Duch Irish sandwich”.
      The Netherlands has numerous tax treaties, low or zero withholding taxes, a strong legal systems and good reputations for enabling transfers of profits and capital to low tax jurisdictions.

        Transfer pricing

        In 2002 the arm's length principle was codified in the Netherlands by Section 8b of the Dutch Corporation Tax Act. The OECD TPG are not part of the Dutch law. From a policy perspective the Secretary of State is of the opinion that the OECD Guidelines intend to provide insight into the way in which the arm's length principle must be applied in practice. In addition, the OECD Guidelines play a major role in an international context in relation to the application of treaties and prevention of double taxation.

        Transfer Pricing Case Law

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        Cases involving the Netherlands

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