Corporate Tax 2025: Rates, Rules and Tips

Corporate income tax is often a deterrent tax. Complex, difficult and difficult to understand. Who is being taxed now and what is being taxed? In this article, we discuss the basic principles of corporate income tax and show that in many cases corporate tax is not that much more difficult than income tax at all. We'll end with some practical tips.

What is the Corporate Tax Rate 2025

The corporate tax rate remained unchanged in 2025 as well. The corporate tax rate is included in article 22 Corporate Income Tax Act 1969 (Vpb Act). Based on this article, the rate is:

However, the rate is not only relevant when it is clear when and what exactly you pay this percentage of tax for. Good to know that the low corporate tax rate was evaluated by the Central Planning Bureau at the end of last year. The evaluation shows that a low rate is limited, effective and not efficient. The cabinet is still considering the next steps.

What is corporate income tax

Corporate income tax is the tax that companies must pay on their profits. The framework for the Corporate Income Tax Act 1969 was already built by the German occupation in the Second World War. The immediate precursor to the current corporate tax is the 1942 Profit Tax.

In terms of its methodology, corporate tax is well suited to income tax for entrepreneurs. For example, the differences in how the profits of entrepreneurs who are subject to income tax and legal entities that are subject to corporate tax are limited.

Dutch corporate tax has changed significantly in recent years as a result of European laws and regulations. In addition, in response to the report, Towards a balance in corporate tax introduced a number of rules that ensure that larger companies in the Netherlands, in particular, pay corporate tax in a more structural way. These rules are complex and difficult to apply; fortunately, SMEs often do not have to deal with them.

Who pays corporate tax

As the name suggests, corporate tax primarily applies to companies. These can be Private Companies (BVs) or Public Limited Companies (NVs).

However, a foundation or association can also be subject to corporate tax, but only if and insofar as it operates a company.

Foreign legal entities can also be subject to tax, such as a German GmbH or Belgian BVBA. A foreign legal form is only subject to tax if it is located in the Netherlands.

Corporate tax does not apply to sole traders, general partnerships (VOFs) and partnerships.

As of 1 January 2025, corporate tax will no longer apply to open limited partnerships (CVs). As of this year, open CVs are therefore not subject to independent taxation, just like closed CVs.

In international situations, a partnership can still become a taxpayer to prevent differences in qualifications.

The tax is paid by the legal person subject to the tax. In the case of a DGA with a BV, the tax is levied by the BV, not by the DGA itself. This is different from sole traders.

What do you pay corporate tax on?

In determining how much tax you have to pay, not only the rate is important, but especially the basis: the profit.

Profit

Chapter 2 of the Vpb Act provides a number of provisions that state how the profit should be calculated. The profit before corporate tax may differ from the commercial profit in the financial statements. Article 8 of the Vpb Act The starting point is that the profit is calculated in the same way as a company's income tax profit. Article 3.8 of the Income Tax Act 2001 determines:

“Profit from an enterprise (profit) is the amount of joint benefits derived from an enterprise under any name and in any form.”

Due to the link with income tax, the profit determination in corporate tax is largely determined in the same way as the profit of a sole trader in income tax. So the basis is the same.

The concept of “advantage” can be either positive or negative. So there can also be a negative advantage, in other words: a loss.

In practice, the profit before corporate tax is determined by reducing income with deductible costs. However, not all costs are deductible and not all income is taxed.

Major anomalies include:

• A dividend paid to a shareholder is not a cost in determining profit.
• A dividend received from a participation (with an equity stake of 5% or more) is not revenue for determining profit.
• Interest costs are not always a deductible cost for determining profit.
• Fines are not a deductible cost when determining profit
• Profit made abroad is not revenue for determining profit if certain conditions are met.
• In the case of restructuring, profit may be disregarded under certain circumstances, whether or not upon request.

Once all exceptions have been checked and the tax profit has been determined, the next step is to determine what the taxable profit is.

Important anomalies:

• Dividend paid is not a cost.
• Dividend received from a participation (≥ 5%) is not revenue.
• Interest costs are not always deductible.
• Fines are never deductible.
• Foreign profits may be exempt.
• Restructuring profits can sometimes be disregarded.

Taxable profit

The taxable profit is determined by reducing the profit with the deductible donations. Article 16 of the Vpb Act provides a definition of what deductible donations are. This includes donations to public benefit institutions (ANBIs) or SBBI support foundations. Deductible donations cannot exceed 50% of the profit or €100,000.

Taxable amount

Of course, it is possible that in a year there is not a positive profit, but a loss. A corporate tax loss can be offset against the profit from the year before or the years after (for profits of more than €1 million, the settlement is limited to 50% of the profit). In order to calculate the taxable amount by which the rate can be multiplied in a year, the taxable profit must therefore be reduced by the deductible losses.

The result of this sum is the taxable amount. Based on this, the tax to be paid is calculated.

Preview

In 2024, BV AG had a deductible loss of €100,000. In 2025, BV A will have the following revenues and costs:

• Turnover €470,000
• Dividend receipts from participations: €20,000
• Costs €70,000
• Fines €1,000
• Donations to charity (ANBI) €1,500

What is the profit

BV A's profit in 2025 amounts to:

• €470,000 (turnover) -/- €70,000 (costs) = €400,000

When determining the profit, the dividend income of participations is not included as revenue and the penalties are not included as a cost. The donations made are also not a cost and are not included in determining the profit.

What is the taxable profit

BV A's taxable profit in 2025 is the profit less the deductible donations: €400,000 -/- €1,500 = €398,500.

What is the taxable amount

BV A's taxable amount is the taxable profit from 2025 less the losses to be deducted. In this example, BV A still has a deductible loss from 2024 of €100,000.

The taxable amount of BVA in 2025 is therefore €398,500 -/- €100,000 = €298,500.

How much tax will BV A pay in 2025:

To determine how much corporate tax BV A pays for the year 2025, the taxable amount must be set off at the applicable rate:

In total, BVA must therefore raise €38,000 + €25,413 = €63,413 by 2025 corporate income tax pay.

What is taxed in short

Determining the taxable amount on the basis of which the corporate tax payable is calculated can be done in the following way:

Optimal use of the low rate

Because corporate tax is a tax that is levied by the company itself, there are sometimes optimization options. Until 2023, this advantage was enormous, because when the low corporate tax rate was still 15% up to a taxable amount of €395,000. As of 2023, this has changed to the current rates and limits. However, there is still an option for optimization, although smaller.

By making optimal use of the rate step, the high corporate tax rate can be postponed for as long as possible. In a holding operating company structure, profits can be made using the management fee that the operating company pays to the holding company are divided between the two companies. The group can therefore remain taxed at the low rate up to a profit of €400,000.

If more profit is made, it can be advantageous to split activities into different companies. An example here is a separate real estate company, to which the operating company pays rent. This allows the profit to be distributed across multiple companies in order to make use of the low rate for as long as possible.

It is important, however, to be very sharp on the expected income when splitting activities across multiple companies. After all, if one company's activities make a loss in a year, that loss can no longer be offset against the other company's profits either.

Length of a financial year

The taxable amount is calculated over one year. Article 7, paragraph 4, Vpb Act states that 'a year' means 'a financial year'. This gives taxpayers plenty of room to choose a financial year. But there must be regular bookkeeping. If the accounts are not regular and have no regular annual closures, the tax is levied over a calendar year.

In the Netherlands, the standard financial year is the same as the calendar year, i.e. from 1 January to 31 December. In many cases, matching the financial year to the calendar year is the easiest.

Companies can also opt for a financial year that differs from the calendar year, for example from 1 July to 30 June of a year. A different financial year often occurs in seasonal companies, such as in agriculture or retail, where the year does not end logically on December 31. By choosing a financial year that is more in line with natural business operations, a clearer picture of annual performance is created.

Companies that often trade internationally or are part of a multinational group often also choose a different financial year. For example, the standard financial year in the United Kingdom is from 1 April to 31 March. A different financial year is then administratively easier for the group as a whole.

When a legal person's tax liability is established or terminated, a broken financial year often occurs. A broken financial year. A broken financial year can be either short or long when set up.

Example: BV A will be established on September 1, 2024, and can be chosen for a financial year that runs from:

• September 1, 2024 to December 31, 2024 (a short financial year)
• September 1, 2024 to December 31, 2025 (an extended financial year)

Note: if you expect a profit that exceeds €200,000, a short financial year would be cheaper!

Conclusion

Corporate income tax is a tax that companies pay on their profits per financial year. The tax is levied by the taxpayer legal person. This can include, for example, BVs or NVs, but also foreign legal forms that are located in the Netherlands.

The tax is levied on the taxable amount. You determine the taxable amount by first determining the profit, then reducing it with the deductible donations to arrive at the taxable profit. The taxable profit is reduced by the losses to be deducted, after which the taxable amount remains.

The taxable amount is multiplied by the 19% rate for the first €200,000 and 25.8% for the portion above. By cleverly splitting up activities, optimal use can be made of the low rate. Given the recent evaluation of the low rate, the question is how long this option will remain. Even with volatile income, splitting can even have a negative effect. A sparring time? Feel free to book an appointment.

Documentation used

• Article 3.8 Income Tax Act 2001
• Article 7 Corporate Income Tax Act 1969
• Article 8 Corporate Income Tax Act 1969
• Article 16 Corporate Income Tax Act 1969
• Article 22 Corporate Income Tax Act 1969
• Chapter II Corporate Income Tax Act 1969
• Letter to Parliament about splitting up due to the low vpb rate and cbcr statistics.
• Offer to evaluate the low corporate tax rate and the introduction of the corporate tax test, lower the tax limit to 200,000 and increase the starting rate to 19%.

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