Netherlands Accounting & Tax Glossary

The 30% ruling is a Dutch payroll tax benefit for skilled employees recruited from abroad. It allows employers to pay 30% of the gross salary tax-free as a compensation for extraterritorial costs. The benefit lasts up to 60 months (5 years). In 2025 and 2026, the 30% rate applies in full. The employee must have lived more than 150 km from the Dutch border before their first day of work.

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.

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.

The deelnemingsvrijstelling (participation exemption) fully exempts dividends and capital gains received by a Dutch BV or NV from a qualifying subsidiary from Dutch VPB. The shareholding must be at least 5%. This makes the Netherlands one of the world's most attractive holding company jurisdictions, particularly for EU and international groups.

The Innovation Box is a Dutch VPB incentive that taxes profits derived from qualifying self-developed intellectual property at an effective rate of 9% rather than the standard 19% or 25.8% rates. To qualify, the IP must be partly developed in-house and typically supported by a WBSO R&D grant. The regime follows the OECD nexus approach.

The KOR (Kleineondernemersregeling) is a Dutch small-business VAT exemption for businesses with annual turnover below EUR 20,000. Businesses registered under KOR do not charge BTW on sales and do not file BTW returns, but also cannot reclaim input BTW on purchases. KOR is opt-in and applies for a minimum of 3 years.

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.

WBSO (Wet Bevordering Speur- en Ontwikkelingswerk) is a Dutch R&D tax incentive. It reduces wage costs for qualifying research and development work. The credit is 32% on the first EUR 350,000 of qualifying R&D wages (40% for starters in their first 5 years); 16% above EUR 350,000. Both BVs and self-employed ZZP individuals can apply.

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.

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.

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.

The Kamer van Koophandel (KvK) is the Dutch Chamber of Commerce, which maintains the Handelsregister (commercial register). Every business in the Netherlands must register with the KvK within one week of starting operations. The KvK issues an 8-digit KvK number, which is the primary commercial identifier for the business.