What you need to know about corporate income tax

Who pays corporate income tax?

Do you do business in a bv (private limited company), an nv (public limited company) or a coöperatie (cooperative)? If so, this legal entity (or legal person) must file a corporate income tax return. Corporate income tax is a direct tax on a legal person's profits. Other legal persons, such as a stichting (foundation) or vereniging (association), pay corporate income tax only in certain cases. In this article, we will use the bv as an example.

Filing a corporate income tax return

Usually, your accountant, bookkeeper, or tax consultant will file the corporate income tax return for you. But you can also file a tax return yourself online via the website of the Belastingdienst (Netherlands Tax Administration). Is your financial year the same as the calendar year? Then you must file a tax return by 1 June of the following calendar year. 

Provisional assessment

Does your business have to file a corporate income tax return? If so, you will receive a provisional assessment (voorlopige aanslag, VA, in Dutch) from the Tax Administration at the beginning of the year. The VA is an amount  based on previous years. Do you expect your profits to be higher or lower this year? Then you can change the VA. You pay the VA in up to 11 monthly instalments. The paid instalments of the VA will be settled with the final assessment based on your tax return.

Do you expect to have to pay corporate income tax and do not automatically get a VA? Then contact the Tax Administration and apply for a VA.

Tax over the financial year

Corporate income tax is calculated over the profit of a financial year (boekjaar) of your business. The financial year can be equal to a calendar year, but it does not have to be. The length of the financial year is stated in the articles of association. You file a corporate income tax return for a calendar year (in Dutch) before 1 June of the following year. Does the financial year not run parallel with a calendar year? Then you file your tax return within 5 months after the end of the financial year. Are you unable to file a tax return on time? Then ask for a postponement (in Dutch).

What falls under corporate income tax?

You pay corporate income tax on the taxable profit of the legal person. That is the profit remaining after deducting losses and expenses you can offset. Operating expenses you can deduct are, for example, labour costs, equipment, subscriptions, and depreciation. Sometimes you have additional deductions and losses from the past that you may offset (in Dutch).

The profit you are left with is called the ‘taxable profit’. You pay corporate income tax on this. Corporate income tax is a fixed percentage of the taxable profit. 

Using deductions and allowances

When determining the profit, you can use allowances. For example, the small projects investment credit or the exemption for remission of profits (vrijstelling voor kwijtscheldingswinst, in Dutch). You can also offset depreciation on assets with a purchase price of €450 and more (in Dutch).

There are also tax schemes that apply specifically to corporate income tax, such as the participation exemption (deelnemingsvrijstelling, in Dutch) and the fiscal unity (fiscale eenheid, in Dutch). First, check if you meet the conditions (in Dutch). Only then are you allowed to use them and can they be beneficial.

Consult with your accountant, bookkeeper, or tax adviser so that you make the best use of deductibles.

Corporate income tax rates 2024

The corporate income tax rate depends on your profits. In 2024, you will pay 19% tax on profits up to €200,000. For profits above €200,000, you will pay 25.8% tax. The rates and amounts can vary from year to year. So, check carefully what the rate is for the year for which you file your corporate income tax return.

Calculation example corporate income tax

Below is an example of how to calculate corporate income tax.