NETHERLANDS Law and Practice Contributed by: Michael Molenaars, Jeroen Smits, Reinout de Boer and Rogier van der Struijk, Stibbe
2.8 Other Taxes on Transactions An enterprise, be it transparent or opaque, may become subject to value-added tax (VAT) when sell - ing services or goods in the Netherlands. Real estate transfer tax (RETT) at a rate of 10.4% should, in principle, be due upon the transfer of real estate or shares in real estate companies. For residen - tial real estate, a general rate of 8% applies. However, if it concerns the acquisition of residential real estate by an individual, which will be used as their primary residence, a reduced rate of 2% is applicable. As a result of the foregoing, real estate investors can no longer apply the 2% rate. As of 2021, there is a RETT exemption for “starters” (ie, persons between the ages of 18 and 35 buying their first primary residence). From 1 January 2026, this RETT exemption only applies to real estate worth less than EUR555,000. 2.9 Other Notable Taxes The transfer of shares in companies that predomi - nantly own real estate as portfolio investment may, under certain conditions and depending on whether it concerns residential real estate, become taxable at 10.4% RETT or 8% RETT. 3. Corporations and Non-Corporate Businesses 3.1 Form of Closely Held Local Businesses Typically, but not always, only small businesses and self-employed entrepreneurs, partly including small independent businesses without staff ( zelfstandigen zonder personeel , or ZZP), operate through non- corporate forms, while medium-sized and large busi - nesses manage their activities via one or more legal entities (eg, BVs). 3.2 Individual and Corporate Rates There are no particular rules that prevent individual professionals from earning business income at cor - porate rates. For tax purposes, an individual is free to conduct a business through a legal entity or in per - son. However, despite the legal and tax differences between those situations, the effective tax burden on the business income will often largely align. The com - bined corporate and personal income tax rates for
generally not held for portfolio investment purposes if a company has substantial operational activities and no group financing or group leasing activities are car - ried out, or if a company is sufficiently taxed with a profit-based tax. In relation to the application of the Dutch participation exemption by Dutch intermediary holding companies with little or no substance, the Dutch government has decided (for the time being) not to introduce legislation to enable the exchange of information with other juris - dictions. A possible amendment of the Dutch rules on exchange of information would have been reviewed by taking into consideration the proposed directive on the misuse of shell entities that was published by the European Commission at the end of 2021 (“ATAD 3”). In December 2022, an amended proposal was pub - lished, which was approved by the European Parlia - ment in January 2023. Multiple alternative approaches have been suggested since 2023 (including one in June 2024 that focused on the exchange of informa - tion, where the fiscal implications would be at the dis - cretion of the member states). However, the European Commission has recently announced that it intends to withdraw the legislative proposal concerning ATAD 3. The European Commission included in its second evaluation of the Directive on Administrative Coopera - tion (DAC) that it will explore the possibility of integrat - ing the principles and concepts of ATAD 3 into the Under the former rules, a shareholder that held at least 5% of the shares in a Dutch company was allowed to deduct a so-called liquidation loss, upon the com - pletion of the dissolution of such company and pro - vided certain conditions were met. This liquidation loss broadly equals the total capital invested in that company by the shareholder minus any liquidation proceeds received. As of 1 January 2021, addition - al requirements (eg, the residence of the liquidated company should be within the EU/EEA and the Dutch shareholder of the liquidated company must have decisive control to influence the decision-making of the company that is liquidated) need to be met in order to deduct liquidation losses exceeding the threshold of EUR5 million. DAC framework. Liquidation Loss
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