Go Dutch After Brexit! The Advantages of Incorporating a Dutch B.V.

By Britt Vrijburg, JAN© Accountants and Business consultants B.V.

At the end of 2020, all seemed signed and sealed. UK Prime Minister Boris Johnson had promised that British entrepreneurs would finally be free to trade after Brexit. This turned out to be completely wide off the mark. British entrepreneurs are now looking for a way to avoid the enormous amount of paperwork and unforeseen VAT charges. The early adaption of awareness-raising measures and incentives has been crucial for the continuation of their business. The most frequently discussed solution? Go Dutch!

Incorporating a Dutch B.V. (the most commonly-used legal entity for business in the Netherlands; comparable with a Ltd.) can be arranged rapidly, approximately within 1–2 weeks. Dutch CIT rates are 15% for taxable amounts up to and including EUR 245,000 and 25% for profits exceeding that amount (2021). A reduced rate is available for business activities covered by the “innovation box regime”. With regards to import VAT, the B.V. can apply for an Art. 23 permit. The Art. 23 permit allows the B.V. to import goods into the Netherlands without pre-financing the import VAT. The import VAT can subsequently be reported in the regular VAT return. This could highly improve the cash flow. Without an Art. 23 permit, it usually takes 3–4 months before the import VAT is refunded.

Is there an alternative ‘way out’? Yes, appoint a Dutch tax representative. The tax representative enables foreign entrepreneurs to benefit from the simplified European VAT regimes such as the reverse charge mechanism and the art. 23-permit.

Make Brexit pragmatic and use the opportunities available in the Netherlands; go Dutch!

Britt Vrijburg

GGI member firm
JAN© Accountants and Business consultants B.V.
Advisory, Auditing & Accounting, Tax
Amsterdam, Weesp, Valkenburg, Schiphol-Rijk, The Netherlands
T: +31 88 2202 410
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W: jan.nl

JAN© Accountants and Business consultants B.V. is a Dutch audit and tax advisory firm, employing 170 people in four offices near Schiphol and Amsterdam. JAN© helps a wide range of (inter) national clients, providing services in the areas of taxation, administration, audits, personnel, salaries, law, merger and acquisitions and business optimalisation.

Britt Vrijburg is an International Tax Advisor at JAN©. Britt is responsible for several areas within international taxation, such as transfer pricing and Brexit.

Published: International Taxation Newsletter, No. 14, Spring 2021 l Photo: Marcos - stock.adobe.com