In this post, we discuss how Dutch Tax Law determines whether an a Non-Dutch business structure is Tax Transparent or Taxable.
Structures with a tax transparent status are not subject to corporate income tax themselves; instead, their income and gains are directly attributed to their owners or participants, who are taxed individually based on their share of the income. Conversely, structures with a taxable status are considered separate taxpayers and are subject to corporate income tax on their profits. The ‘tax classification’ and treaty treatment of such income can be different and understanding these classifications is essential for effective tax planning, compliance with Dutch regulations, and managing cross-border tax obligations.