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If you own a private or public limited company (BV or NV), you must file a corporate income tax return (VPB) for your company. Foundations or associations only have to file corporation tax returns in specific circumstances. Depending on the level of profit, they may be exempt.
Your company pays corporate income tax on the taxable profit in a single financial year. You can further reduce the taxable profit if your company has deductible losses. More often than not, a financial year is the same as a calender year. However, a 'broken' financial year (e.g. from May to April) is also permitted. The financial year for the corporate income tax return must be the same as the financial year in the company’s articles of association.
Carry forward and back of losses
You may offset losses with future profits or profits from previous years. You offset losses initially against the profit from the previous year (carry back). If this is not possible, you may offset your losses with future profits (carry forward). The time allowed to carry forward losses (offset them against future profits) is limited to just 6 years.
In order to calculate the profit for corporation tax, you must apply more or less the same rules as apply to income tax.
Are your activities innovative? And are you making a profit? Then you may be able to put the profit from these activities in a special tariff box on your corporate income tax return: the innovation box. You then pay less tax. It is conditional that you have a patent or a foreign patent or that you apply for the R&D payroll tax allowance (WBSO).
Depreciation of business premises
Since 2019, companies are no longer allowed to use buildings in company use for depreciation in their corporate income tax return, unless these buildings are in the company books for a value that exceeds the Valuation of Immovable Property (WOZ) value. There is a transition measure for companies which started using the building before 1 January 2019 and have not used the depreciation in their corporate tax returns over 3 years. This brings this measure into line with the regulation for buildings used as investment property.
Filing your corporate income tax return
The return for corporate income tax is filed each year, at the end of the company’s financial year. The corporate income tax rates (in Dutch) are quoted on the Tax and Customs Administration website. These rates are being lowered in stages between 2019 - 2021. The high corporate tax rate will not change in 2020. In 2021, it will be lowered, but less than expected. The high corporate income tax rate applies to taxable profits over €200,000. In 2020 this rate is 25%. In 2021, it will be lowered to 21.7%. The low rate (for profits under €200,000) has dropped to 16.5% in 2020 and will drop to 15% in 2021. You have to file your corporate income tax return digitally.
Since 1 January 2020, interest on tax is not charged on corporate income tax if you submit your tax return before the 1st day of the 6th month (usually 1 June), and if the submission has been approved.
It is no longer possible to deduct administrative fines from your income tax or corporation tax from 1 January 2020. As an employer, you will no longer be allowed to deduct compensation you give your employees for administrative fines.
These changes have come into effect on 1 January 2020.
Measures as of 2021
As part of the Tax Plan 2021, the Dutch cabinet intends to implement 3 measures with regard to corporate income tax:
- If you make a profit with innovative activities, the profit is exempt from corporate income tax. As of 1 January 2021, the innovation box tariff will increase from 7% to 9%.
- Losses as result of the liquidation of a subsidiary company or the discontinuation of business activities abroad may now still be deducted from profits. However, from 2021, this measure will be adjusted to restrict businesses in deducting losses from their profit.
- In special cases, your corporate income tax can be reduced if you pay all at once. From 2021 onwards, this tax reduction will be abolished.