GUIDELINES FOR CONDUCTING A ONE-PERSON COMPANY IN THE NETHERLANDS:
- The owner is personally responsible for all company’s activities and assets.*
- A company operating on the Dutch market is obligated to have its own BTW number (Tax Identification Number). The company is also obliged to declare its turnover on a periodic basis, even if, within a given period no turnover was made.
- Within a year, a company must have at least three different contractors for which it performs services.
- Minimum yearly income: €16.000; minimum investments: €2.500.
- The owner is obliged to declare its income tax and submit the so-called Zorgverzekeringswet payment. That is not an insurance and amounts to 5% of the declared income.
*A one-person company’s assets includes personal possessions of the owner and his spouse, if they haven’t signed any agreement.
COMPANY CAR / PRIVATE CAR:
There are pros and cons to having a company car. The main advantage of having a car registered on company’s name is that all costs of that car are the company’s expenses. This means that VAT paid on purchasing the car, gas, reparations, check-ups, car equipment, etc. are tax deductible.
The disadvantage of having a company car could be the restricted amount of kilometers that the owner can drive for private purposes – maximum 500 km per year. Exceeding this amount will lead to an increase of income tax to be paid in a given financial year.
Furthermore, the owner is obliged to run a daily registry of the kilometers driven. Every police control can require presenting this registry.
It’s also important to know that there are new rules regarding the administration of gas purchases. As a result of numerous tax abuses in this area, anonymous invoices for purchasing gas are no more sufficient in bookkeeping. In the case of cash payment for gasoline, the invoice should include the name and fiscal number (BTW) of the buyer. This is not necessary only when a buyer pays with the company’s debit card or credit card. Only then the Inland Revenue Office can see that the gasoline was indeed purchased at the company’s expanse.
In the case when a private car is used for the company’s purposes, there is an option of deducting the costs of the car from the income statement. Deducted amount is then multiplied by €0.19 per kilometer.
The following points are tax deductible:
- Income tax declaration submitted together with the spouse, regardless of the spouse’s income.
- Kilometers used to arrive to work by public transport.
- Pension plan in The Netherlands.
- Mortgage in The Netherlands.
- Costs of education in The Netherlands (does not include costs of Dutch lessons).
- Costs of your children’s education abroad, i.e. school materials, books, school fees, costs of traveling to school, etc. (all needs to be presented in a form of invoices paid).
- Costs of a handicapped child’s care (travel costs to the care center).
www.svb.nl – child allowance, for those children whose parents are working or living in The Nederlands, is does not depend on the income of the parents and child’s residence. Paid per quarter.
www.toeslagen.nl – Kindergebondenbudget – child allowance, depended on the parent’s income, paid monthly or yearly.
www.toeslagen.nl – Kinderopvangtoeslag – allowance for the nursery/day care after school, depended on the parent’s income, paid monthly or yearly.
www.toeslagen.nl – Huurtoeslag – allowance for the social house rent, depended on your income and the rent amount.
www.uwv.nl – unemployment allowance, illness and social benefits.
www.digid.nl – electronic signature.
www.ind.nl – immigration cases, visa.
www.belastingdienst.nl – information about taxes.