How does the Dutch legal and tax system excel compared to other countries?
I was wondering in what regards the Dutch law system excels compared to other countries and where it might be lacking
Here are a few thoughts on this. Let me know what you think.
Main advantages compared to similar jurisdictions (such as UK, Germany, France, Belgium, Nordics etc.):
- relatively low corporate income tax and other tax levels, among them personal income tax, are on the lower end compared to its peers.
- Well working international tax system, probably best participation exemption which makes expansion to other countries from a Dutch base and sending dividends back to and from the Netherlands easy and usually tax-free.
- Many tax treaties with other countries.
Read more about taxes for businesses in the Netherlands in this guide.
Furthermore, I just wrote this piece on a few tax changes in NL in 2023. A few taxes are going up, but not quite as much as in its neighbouring countries and primarily the UK.
Here is an article with some facts, comparing NL to other countries.
A few difficult aspects of the Dutch system:
- Strict KYC policies, in many cases a resident director is required to get through the KYC checks at instiutions, tax authorities, banks etc. Proper checks are important, but in some cases it seems more bureaucratic than necessary.
- If you are working in your own company, you need to pay out a salary (if you are able to pay it). Meaning you cannot choose to simply pay everything out in dividend (exceptions apply).