Frequently asked questions on corporate income tax

Dutch corporate income tax has two brackets (article 22 of the Corporate Income Tax Act 1969). Profit up to € 200,000 is taxed at the entry rate of 19%; anything above at the standard rate of 25.8%. These are the 2026 rates; the bracket and the percentages have changed several times in recent years, so do not rely on figures from an old memo.

As a director-shareholder you work for your own company, and the law does not accept you paying yourself too little to save tax (article 12a of the Wage Tax Act 1964). Your salary must be at least the highest of three benchmarks: the salary from the most comparable employment, the salary of the highest-paid employee in your company, or a statutory reference amount set each year. Lower is only possible if you can show it is at arm's length. This is the first thing the tax authorities look at in a company.

Salary is deductible in the company but taxed in box 1 at progressive rates, with wage tax and contributions. Dividend is not deductible, because corporate income tax has already been paid on it, and is then taxed in box 2. Which is better on balance depends on your profit level, on the customary salary you have to take anyway, and on what you want to leave inside the company. It is a calculation per situation, not a rule of thumb.

A loss can be carried back one year to the preceding financial year and then carried forward indefinitely against future profits. Above a threshold amount there is a restriction: only part of the profit above that threshold can be set off against earlier losses each year. For most smaller companies that restriction does not bite, but the loss does have to be formally determined by decision, otherwise you are left empty-handed later.

The corporate income tax return must in principle be filed within five months of the end of the financial year. With a financial year equal to the calendar year, that means before 1 June. An extension can be arranged through an adviser. Separately, the annual accounts must be filed with the Chamber of Commerce. That is a different deadline with a different sanction, and consequences for directors' liability.

In a fiscal unity several companies are treated as one taxpayer for corporate income tax. The advantage: profits and losses are set off against each other and intra-group transactions become invisible for tax. The drawback: the 19% entry rate applies once for the whole unity instead of per company, and the companies are jointly and severally liable for the tax debt. Whether it pays off depends on how the results relate to each other.