Small Business Tax in Netherlands

What corporate income tax does a Dutch BV pay?

A Besloten Vennootschap (BV) is the standard Dutch private limited company and is subject to vennootschapsbelasting (VPB) — corporate income tax — under the Wet op de Vennootschapsbelasting 1969. For fiscal years starting on or after 1 January 2023, and unchanged through 2025, the rate is 19% on the first EUR 200,000 of taxable profit and 25.8% on any profit above that threshold. A BV with EUR 350,000 of taxable profit therefore pays: EUR 200,000 at 19% (EUR 38,000) plus EUR 150,000 at 25.8% (EUR 38,700), totalling EUR 76,700 — an effective rate of approximately 21.9% on the total.

Taxable profit equals accounting profit adjusted for non-deductible items (certain fines, non-arm's-length costs) and tax-specific allowances. The BV files its VPB return (aangifte vennootschapsbelasting) within five months of its financial year-end — for a December year-end that falls on 1 June of the following year, with extensions commonly available from the Belastingdienst on request.

How does the DGA salary rule work and what is Box 2 dividend tax?

A director who holds 5% or more of a BV's shares is classified as a directeur-grootaandeelhouder (DGA). The Belastingdienst requires the DGA to receive a gebruikelijk loon (customary salary) under Article 12a of the Wet op de Loonbelasting 1964. In 2025 the minimum customary salary is EUR 56,000 per year. If a comparable employee in the same role (without a shareholding relationship) earns more, or if the BV's highest-paid employee earns more, the DGA salary must equal that higher figure.

The customary salary is taxed in Box 1 (work and home) at progressive personal income-tax rates: 35.82% up to EUR 38,441, 37.48% from EUR 38,441 to EUR 76,817, and 49.5% above EUR 76,817 (2025 rates). The BV withholds loonheffing (wage tax) on this salary as it would for any employee.

After the BV pays VPB on its profit, the DGA may take a dividend from retained after-tax earnings. Dividends are taxed in Box 2 (substantial interest). The 2025 two-tier Box 2 structure applies: 24.5% on the first EUR 67,804 of Box 2 income and 31% on any excess. A DGA with a fiscal partner can split the dividend allocation, doubling the lower-rate bracket. The BV withholds 15% dividend tax (dividendbelasting) on any distribution, which is credited against the DGA's personal Box 2 liability in the annual income-tax return (aangifte inkomstenbelasting).

The combined tax load on distributed BV profit is therefore VPB plus Box 2. On EUR 100,000 BV profit taxed entirely at the 19% bracket, the BV retains EUR 81,000 after VPB; distributing all of it as dividend to a DGA within the lower Box 2 bracket incurs EUR 81,000 x 24.5% = EUR 19,845 in Box 2 tax, leaving EUR 61,155 in the DGA's hands — an overall effective rate of approximately 38.85% before the EUR 56,000 salary cost.

What taxes apply to a ZZP sole trader or eenmanszaak?

Many Dutch entrepreneurs operate as a sole trader (eenmanszaak) or as a ZZP (zelfstandige zonder personeel, self-employed without staff) rather than forming a BV. There is no corporate legal entity: the owner and the business are legally the same person. All business profit is reported directly in the owner's personal income-tax return and taxed in Box 1 alongside any employment income.

To qualify for the entrepreneur deductions, the Belastingdienst must recognise the business as a genuine enterprise and the owner must meet the urencriterium (hours criterion): at least 1,225 hours worked in the business per calendar year. Meeting this threshold unlocks the ondernemersaftrek (entrepreneur deductions) package:

• Zelfstandigenaftrek (private-business ownership deduction): EUR 2,470 in 2025. This amount is being phased down annually, reaching EUR 900 by 2027. The deduction reduces taxable profit before the Box 1 rates apply, but the maximum deduction rate is capped at 37.48% (the second Box 1 bracket) regardless of the owner's top marginal rate.
• Startersaftrek (starter deduction): an additional EUR 2,123 per year for the first three calendar years in which the entrepreneur qualifies for zelfstandigenaftrek — available a maximum of three times in the first five years of the business.
• MKB-winstvrijstelling (SME profit exemption): 12.7% of profit after the above deductions is exempt from Box 1 income tax. This exemption applies automatically to any recognised entrepreneur; no hours criterion is needed for this specific relief. Like the zelfstandigenaftrek, the exemption is applied at a capped rate of 37.48%.

Registration at the Kamer van Koophandel (KVK) is required before starting an eenmanszaak. After registration, the Belastingdienst assigns a BTW-nummer (VAT number) if the business qualifies as a VAT entrepreneur.

For a qualified professional seeking Netherlands country overview context — including how the Dutch two-box structure affects personal financial planning — working with a registered tax professional (belastingadviseur) is advisable given the interaction of business deductions, social-insurance contributions (premies volksverzekeringen), and the healthcare levy (Zorgverzekeringswet bijdrage).

What is the KOR small-business VAT scheme?

Dutch VAT (BTW, belasting over de toegevoegde waarde) is charged at 21% standard rate (9% reduced rate for food, books, medicines, and certain services). However, small businesses may opt into the KOR (Kleineondernemersregeling) to simplify or eliminate their VAT obligations entirely.

Under the KOR, a business with annual turnover not exceeding EUR 20,000 (excluding VAT, in both the current and the preceding calendar year) may apply to the Belastingdienst to be exempt from charging BTW on its invoices. In exchange, the KOR participant cannot deduct input VAT on business purchases or investments and is not required to file periodic BTW returns with the Belastingdienst. The scheme applies automatically for businesses with annual turnover under EUR 2,200 and no KVK registration; all others must apply formally via Mijn Belastingdienst Zakelijk at least four weeks before the desired start date.

A significant 2025 change removed the previous mandatory three-year participation period: businesses can now exit the KOR with one month's notice, though they are blocked from rejoining for the remainder of the current calendar year plus the following calendar year. Additionally, from 1 January 2025, the Netherlands aligned with the broader EU SME VAT framework: businesses from other EU member states may apply for the Dutch KOR if their Netherlands-only turnover is below EUR 20,000 and their total EU-wide turnover is below EUR 100,000.

The KOR is most beneficial for businesses selling directly to private consumers (who cannot reclaim input VAT anyway) with low input costs. It is less attractive for businesses with significant capital investment requirements or with B2B customers who expect a VAT invoice to reclaim.

What is the WBSO R&D tax incentive?

The WBSO (Wet Bevordering Speur- en Ontwikkelingswerk) is a government scheme administered by the RVO (Rijksdienst voor Ondernemend Nederland) that reduces the effective cost of R&D labour by providing a credit against wage tax (loonheffing) for qualifying research and development activities. Both BV entities with R&D employees and ZZP entrepreneurs meeting a minimum of 500 R&D hours per year can access the scheme.

For 2025, the WBSO credit rates for employers are: 36% of qualifying R&D wage costs up to approximately EUR 380,000 per employer per year, and 16% on qualifying R&D wage costs above that threshold (uncapped). Startups in their first three years of business receive an enhanced rate of 50% on the first EUR 380,000 bracket. Self-employed entrepreneurs who qualify receive a fixed annual WBSO deduction (rather than a wage-cost credit), since they do not pay payroll tax in the employer sense.

Applications are filed in advance through the RVO portal, requiring eHerkenning level 3 authentication. Applicants must describe qualifying projects in concrete technical terms: the work must involve developing a technically new product, process, or software programme, or conducting technical-scientific research. Routine engineering, commercial adaptation of existing technology, and market research do not qualify. Approved applicants receive an R&D declaration (S&O-verklaring) specifying the approved hours and WBSO base; the credit is applied by reducing the monthly loonheffing remittances to the Belastingdienst.

Businesses with qualifying WBSO R&D activity may separately access the Innovation Box (Article 12b Wet Vpb 1969), which taxes profit attributable to qualifying R&D-derived intellectual property at an effective rate of 9% rather than 25.8%. The two reliefs can be stacked: WBSO reduces the current-year cost of producing the IP, and the Innovation Box reduces the tax on income generated by that IP once commercialised.

Small businesses weighing the BV versus ZZP choice, assessing KOR eligibility, or applying for WBSO for the first time are well advised to consult a qualified tax professional registered with the Belastingdienst who can review the specific facts and figures applicable to their situation.