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Tax substance requirements | Netherlands


For actual presence (tax substance) in the Netherlands it is important that the directorship will be provided by Dutch residents. The Dutch minimum tax substance requirements for holding and financing companies read as follows:

> at least 50% of the members of the board of directors, with a right to make decisions, lives or is factually residing in the Netherlands;

> the directors residing in the Netherlands have sufficient knowledge to perform their activities in their capacity as a director of the Dutch company. The company has adequate personnel (either of its own or from third parties) for the adequate execution and registration of the transactions;

> the (most important) board decisions are made in the Netherlands;

> the (main) bank account of  the Dutch company is controlled from within the Netherlands;

> the bookkeeping of the Dutch company takes place in the Netherlands;

> the Dutch company complies with all its tax obligations;

> the Dutch company has its registered address in the Netherlands, while the company is, according to its best knowledge, not (also) a resident of another jurisdiction for tax purposes.

In case any loans flow through the company there is an additional criterium:

> the Dutch company's minimum equity is adequate in relation to the functions performed (taking into account the risks assumed and assets used). It is advised to have an equity of at least 1% of the loan amount with a maximum of EUR 2,000,000. 

It is announced by means of a draft decree that two additional requirements could be added to the above list:

> the Dutch company incurs minimal wage costs related to holding activities in an amount of EUR 100,000;

> the Dutch company has an equipped office to its disposal which is also actually used for holding/financing purposes.

The date on which this amendment would apply is still unknown.

Contact us for more information.

Useful links:

Letter of Dutch State Secretary dated 23 February 2018