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VPB (Vennootschapsbelasting)

Vennootschapsbelasting (VPB) is Dutch corporate income tax. The rate is 19% on the first EUR 200,000 of taxable profit and 25.8% above that threshold. BVs, NVs, and most other Dutch legal entities are subject to VPB. The annual return (aangifte vpb) is filed with the Belastingdienst within 5 months of the financial year-end.

BV (Besloten Vennootschap)

A Besloten Vennootschap (BV) is a Dutch private limited company, the most common corporate structure for entrepreneurs, SMEs, and foreign investors setting up in the Netherlands. Since the 2012 Flex-BV law, minimum share capital is EUR 0.01. The BV is a separate legal entity; its shareholders have limited liability. Shares are not publicly tradeable.

BTW (Belasting over de Toegevoegde Waarde)

BTW is Dutch VAT (Value Added Tax). The standard rate is 21%, the reduced rate is 9% (food, books, medicines, passenger transport), and 0% applies to exports. Businesses under EUR 20,000 annual turnover can use the KOR small-business exemption. Most businesses file quarterly BTW returns via the Belastingdienst portal.

DGA (Directeur-Grootaandeelhouder)

A DGA (Directeur-Grootaandeelhouder) is a company director who holds a substantial interest of at least 5% in that company's shares. Most Dutch BV founders are DGAs. The DGA must receive a customary wage (gebruikelijk loon) from the BV of at least EUR 56,000 per year in 2025, ensuring wage tax is paid before profits are distributed as dividends.

Box 2 (Aanmerkelijk Belang)

Box 2 is the Dutch income tax category for substantial interest income. It applies when a person holds at least 5% of the shares in a company. Dividends and capital gains from those shares are taxed at 24.5% on the first EUR 67,804 per person and 31% above that (2025). The threshold is per individual, not per company.

Gebruikelijk Loon (Customary Wage)

The gebruikelijk loon is the minimum salary a DGA must pay themselves from their own BV. For 2025, the statutory minimum is EUR 56,000 per year. It must equal the highest of this floor, 75% of the most comparable employment, or the salary of the highest-paid employee in the company. Underpaying triggers retrospective wage tax and penalties.

Home office costs are only deductible for VPB purposes if the workspace is formally let to the BV under a written rental agreement at commercial rent. For employees and DGAs, a tax-free home working allowance of EUR 2.35 per day under the WKR is the practical alternative.

Wages, salaries, employer national insurance contributions, and pension contributions paid to employees and the DGA are fully deductible for Dutch VPB. The DGA minimum salary (gebruikelijk loon) is EUR 56,000 in 2025. Remuneration above EUR 650,000 per individual faces a 25% partial disallowance.

Accountancy, legal, tax advisory, and other professional service fees incurred for business purposes are fully deductible for Dutch VPB. Fees directly related to capital transactions such as M&A legal costs for acquiring a subsidiary are capitalised into the cost base rather than expensed.

Company car costs are fully deductible for VPB. If the car is also available for private use, a taxable benefit in kind (bijtelling) at 22% of catalogue value is added to the DGA's or employee's wage. A no-private-use declaration (verklaring geen prive gebruik) eliminates the bijtelling if private use is genuinely nil.

Business meals and client entertainment costs are 80% deductible for Dutch VPB. The remaining 20% is a permanent disallowance under the gemengde kosten rule (Article 3.15 Wet IB applied via VPB). There is no monetary cap; the 80% rule applies to restaurant meals, client hospitality, and similar entertainment.

Business equipment and machinery are capitalised and depreciated over their economic useful life for Dutch VPB. Small items below approximately EUR 450 can be expensed directly. Investment incentives include KIA (28% small-scale deduction), MIA (27-45% for environmental assets), and VAMIL (accelerated depreciation). Buildings can only be depreciated down to their WOZ value.