International Structures

When Your Foreign Company Becomes Taxable in the Netherlands

Updated: 2026 Holdwise editorial team Permanent establishment International Corporate tax

You can owe tax in the Netherlands even if your only company is abroad. If your foreign business has a lasting presence here, part of its profit becomes taxable in the Netherlands. At Holdwise, we keep this answer up to date and change it when the rules change.

The basic rule

A country may tax a foreign company when that company has a fixed place of business there and does its work through that place. In tax treaties, this is called a permanent establishment. Otherwise, your profit is taxed only in your home country.

If you only sell to Dutch customers from abroad, you pay tax at home. If you have a real operation here, part of the profit is taxed in the Netherlands.

When you have a taxable presence

Two situations account for almost every case.

A fixed place you work from. For example an office, a workshop, a factory, a warehouse you operate from, or a branch. Three things must be true at the same time. There is a place, it is available to you for some time, and you use it for the work of the business. One week in a booked meeting room is too short. An office rented for a year with your people in it counts.

A person who closes deals for you. This is someone in the Netherlands who regularly concludes contracts in your name. It can also be someone who negotiates them until your head office only has to sign. That person alone is enough for a taxable presence. An independent agent who works for several clients in their own way is generally outside the rule.

Building and construction work has its own rule. A building site becomes taxable when the work lasts longer than the period in the treaty that applies. This period is often twelve months.

What stays outside the rule

Activities that only support your business are outside the rule. Examples are storing goods for delivery, keeping stock for processing by someone else, buying goods, collecting information and preparatory work.

Be careful with two points. First, the exception applies only when the activity really is supporting. A warehouse from which you also sell and send goods to customers is part of the business. Second, if you split one operation into several small parts, the result is the same. The tax authority looks at connected activities of the same group together.

What it costs when you have one

Your foreign company becomes liable to Dutch corporate tax on the profit attributable to the Dutch operation. The rates in 2026 are 19% on the first €200,000 of profit and 25.8% above that.

You calculate this profit in the same way as prices between group companies. The Dutch operation is treated as if it were a separate business dealing with the head office. It earns the profit that matches the work it does and the risk it takes. See charging your own foreign company.

Your home country then applies the treaty. It either exempts that profit or gives a credit for the Dutch tax. This way, the same profit is taxed only once.

The other obligations

A taxable presence usually means more obligations than corporate tax alone.

Registration. The branch is registered with the Dutch Chamber of Commerce and with the tax authority.

Payroll. For staff working here, you generally pay Dutch wage tax and social security contributions. These obligations often start earlier than corporate tax.

Value added tax. Separate rules apply. You can owe Dutch value added tax while you are outside the profit tax rule, and the other way around. Look at the two questions separately.

A branch or a Dutch BV

Once you have a real operation here, you choose between two options. You keep it as a branch of your foreign company, or you set up a Dutch BV (besloten vennootschap, the Dutch private limited company).

A branch is simpler to start. Everything stays in one legal entity, so your foreign company bears the Dutch risks directly. A BV keeps the risk separate and gives you a Dutch identity that customers and banks recognise. With a BV, you also get access to Dutch rules beyond the treaties. For most businesses that plan to stay, a BV is the better choice within a year or two. See setting up a Dutch BV.

The main points

With a fixed place you work from, or a person who closes deals for you, part of your profit is taxed here. The rate is 19% up to €200,000 and 25.8% above that. Activities that only support the business are outside the rule. Payroll and value added tax have their own rules and often start first. If the operation is real and lasting, a Dutch BV is usually the better choice.

Does your company want its European entity in the Netherlands? See setting up a Dutch subsidiary for the steps, the costs and a comparison with other countries.

Frequently asked questions

Does selling to Dutch customers make me taxable here? +

Only if you also have a taxable presence here. Profit from selling to Dutch customers from abroad is taxed in your home country. You have a taxable presence here with a fixed place of business, or with a person who regularly concludes contracts in your name.

Does a warehouse create a permanent establishment? +

It depends on how you use it. Storing goods for delivery is a supporting activity and is generally outside the rule. A warehouse from which you also sell and send goods to customers is part of the business, and can be a permanent establishment.

What tax rate applies? +

Dutch corporate tax, at 19% on the first €200,000 and 25.8% above that in 2026. It applies to the profit that belongs to the Dutch operation.

Sources Belastingdienst · KVK · wetten.overheid.nl Last updated: 2026