1. Johan and Maria, Part II

2. Short overview Dutch taxes

3. Short overview Dutch taxes (1)
Corporate income tax
Value added tax (VAT)
Wage tax
Personal income tax
Capital tax
Foreign business profits are exempt (0%) and local Dutch profits are taxed (20%-25%);
A company performing business operations in the Netherlands is subject to VAT (21%) and needs a VAT registration. As a result the company is required to send invoices increased with VAT and on the other hand input VAT can be recovered;
Employers need to withhold wage tax for employees, which is an advance levy in respect of personal income tax;
Individuals working in the Netherlands are subject to Dutch personal income tax (1.85% - 52%). A possibility exists to obtain a 30% ruling for foreign people assigned to the Netherlands (as a result 30% of the income is tax free). Salary split possibilities for directors of Dutch companies exist;
No capital tax exists in the Netherlands; 3

4. Short overview Dutch taxes (2)
Withholding taxes (WHT)
Real estate transfer tax
Insurance tax
Inheritance / gift tax
Municipal property taxes
Interest and royalty payments: no WHT exists Dividend payments: 15% dividend WHT. Reduction to nil possible under (i) tax treaties, (ii) EU law, (iii) obtaining a specific exemption for contributed retained earnings or (iv) as a result of specific tax structuring (i.e. emigration and subsequent liquidation or other possibilities);
2% RET tax on transfer of private property (for living purposes); 6% RET tax on transfer of business property (exemptions are possible);
Tax on insurance premiums or related services (21%);
Inheritance / gift tax is levied from individuals who are a residents of the Netherlands for Dutch tax purposes. Thus individuals who are a foreign tax resident under the NL/foreign double tax treaty would not be subject to Dutch Inheritance / gift taxes if they would have a Dutch company;
Dutch municipalities levy local tax with respect to ownership of real estate. 4

5. Case study Verona 2015

6. Confidentiality structures
1. Legal demerger
Based on Dutch tax law and Dutch Civil Code it is possible to split-off the group in a way that Rune will obtain all the shares in the factory company.
The dividing legal entity transfers all its assets/liabilities to at least two acquiring legal entities (existing legal entities or new ones)
Dutch CIT Act (article 14a):
If certain criteria are met article 14a Dutch CIT Act provides for deferral of taxes that could be charged on the difference between the fair market value of such assets and liabilities and their book value for tax purposes. Also deferral of Income tax claim.

7. Legal Demerger HC (NEW 1) HC (NEW 2) Mountaineering FACTORY Equipment
RUNE
JOHAN
MARIA
SENIOR E.
HC (NEW 1)
HC (NEW 2)
FACTORY
Mountaineering
Equipment
Minority Investments 7

8. 2. Minority investments
The participation exemption (article 13 Dutch CIT Act) provides for an exemption from corporate income tax of any profit derived from a qualifying shareholding in another company, whether domestic or foreign A Dutch entity can benefit from the participation exemption if it holds at least 5% of the nominal paid-up capital of another company.
Provided that a foreign subsidiary has an active business, local CIT can be nil. 8

9. 3. Research & Development
The Dutch government has introduced several tax incentives for research and development (R&D). The three most important incentives:
Dutch innovation box: Effective CIT rate of 5% for all profits stemming from innovative activities resulting in a self developed intangible asset. The box also applies to intangible assets for which no patent is granted but which result from R&D activities for which an R&D certificate was received.
Losses can be offset against the regular CIT rates.

10. Wage tax reduction:. Reduction is 35% of the first € 250
Wage tax reduction: Reduction is 35% of the first € of the total salaries of such employees and 15% on any excess. For starting companies developing technological products the reduction is 50%. The maximum reduction per employer or fiscal unity is €
R&D deduction (RDA)
Applies for costs and expenditure directly related to a taxpayer’s R&D activities (except for wage costs). The RDA reduces taxable income and, for , the RDA percentage is 60% of R&D costs and expenditure.

11. New structure HC (NEW 2) Research & Mountaineering Development
JOHAN
MARIA
SENIOR E.
HC (NEW 2)
Research &
Development
Mountaineering
Equipment
Minority Investments

12. 4. Acquisition of shares
Subject to the conditions and restrictions, an acquisition of shares by the company is a way to acquire the 5% held by the senior employee.
- Senior employee He has a so-called “substantial shareholding” (in Dutch: “aanmerkelijk belang”). His profit will be taxed against the income tax rate of box 2 (flat rate of 25%).
- Company The company is required to withhold Dutch dividend withholding tax at a rate of 15%.

13. 5. Share (option) plans
The tax benefits of options are abolished several years ago. No deduction at the level of the company and wage tax on the fair market value at the date of exercise by the employee.
Often used is an employee participation holding company. The employee company has a (limited) right to the profits of the active subsidiary. With the tax authorities the taxable benefit for the employee can be negotiated upfront.

14. 6. Transfer of shares to Hans
Gift and inheritance tax
Shares can be donated to Hans exempt from gift tax: Enterprises (also shares in holding companies with business subsidiaries) can be donated or inherited exempt from tax up to a value of € € ; 83% exemption for the excess in value.
Personal income tax Shares can be donated to Hans exempt from levy of income tax: Almost the same criteria as for the gift and inheritance tax exemption + employee must have an employment for at least 36 months.

15. Dank u wel!