We know the advantages!
Tax planning forms an important part of structuring international investments and businesses.
Trust Company Amsterdam B.V. is the professional party to set up an intended international structure which is always based on tax advise from a specialised tax lawyer.
We rely on tax specialists for evaluating all elements of fiscal consequences. To enable our clients to get top level observations we maintain professional contacts with all major tax lawyer firms.
The Netherlands are well-known and tax efficient for the following typical structures.
International Holding structures
A Netherlands intermediate holding company holds shares in a subsidiary company located outside the Netherlands.
If all conditions are fulfilled to qualify for the participation exemption no corporate income tax is levied on dividends received from the subsidiary or capital gains realized from the sale of the shares of this foreign investment.
Often used by oil & gas companies.
Real Estate Investment structures
International investment in real estate is a specific and very often used form of a holding structure.
In a Netherlands parent-subsidiary structure the real estate investment is both held and managed.
When the real estate is to be sold, the shares of the Netherlands subsidiary, which is holding the real estate, are sold.
Proceeds from the sale of these shares are tax exempt in the holding company as a consequence of the partici[pation exemption.
Cross-border Intra Group Finance structures
Intra-group financing can be achieved by creating an intermediate Netherlands finance company.
This company borrows monies from internal and/or external sources for re-lending purposes to group companies.
The intrest paid may be deducted from the intrest received. As a consequence no Netherlands corporate tax is paid on the intrest received with respect to the loans. Only a small spread is regarded as taxable income in the Netherlands.
Oil & gas companies appreciate our legislation.
A cross-border flow of payments for intellectual property can be structured through a Netherlands royalty company.
Copyrights for movies, music and books, trademarks and patents, images and industrial property rights are obtained by the Netherlands company for further sublicensing world wide.
Outgoing royalties may be deducted from the royalties received. Similar to intrest structures, only a small spread is regarded as taxable income in the Netherlands.
For all above mentioned structures the international tax treaty network concluded by the Netherlands is a great advantage to substantially reduce withholding tax in the source countries.
Further, it is important to know that the Netherlands do not levy withholding tax on outgoing intrest and royalty payments.
An important tax feature is the participation exemption.
Dividends and capital gains derived from a shareholding are exempt from corporate tax if the equity of the participation is wholly or partly divided into shares (and is not a transparant partnership or similar entity) and this subsidiary is not a low taxed passive company. The latter means that the subsidiary must meet certain conditions, amongst others it must be subject to an effective corporate tax rate of 10% and more than half of the assets must have a business objective. Real estate investments are not considered passive if it passes 90% of the assets of the subsidiary.
As a consequence the applicability of the participation exemption will depend on how the investment in the subsidiary is structured.
Trust Company Amsterdam B.V. considers it as one of its important tasks to be a guide in this field and to finally create a structure according to the best options available.