Investing and
Trade in the
Netherlands &
Netherlands the
gateway to Europe
September 16, 2014
Agenda
1
Introduction
2
The Netherlands, an overview & European
hub
3
The Netherlands, a tax update
4
Q&A
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
1
With you here today
Laurens Kreuze
Head of high growth
markets – Africa
Laurens H.A. Kreuze
Partner, KPMG Accountants N.V.
Laan van Langerhuize 1
1186 DS Amstelveen
Starting for KPMG
Nigeria in Lagos per 1
November 2014
Phone: +31 20 656 7461
Mobile: +31 6 537 29 674
E-mail: Kreuze.Laurens@kpmg.nl
Jens Karreman
Tax expert high growth
markets
Jens Karreman
Partner, KPMG Meijburg & Co
Prof.dr. Dorgelolaan 30D
5613 AM Eindhoven
Phone: +31 40 250 2450
Mobile: +31 6 215 58 268
E-mail: Karreman.Jens@kpmg.nl
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
2
KPMG in the Netherlands
KPMG Global
Founded
1987 merger between Peat Marwick and Klynveld Main
Goerdeler
Revenue (2013)
US$ 23,4 billion
Employees
152,000 in 156 countries
Industry
Professional services
Main services
Audit, tax, and advisory
KPMG in the Netherlands
Founded
1919 by Piet Klynveld
Revenue (2013)
EUR 606 million (approx. US$ 833 million)
Employees
3,131
Industry
Professional services
Main services
Audit, tax, and advisory
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
3
KPMG’s High Growth Market Desk Africa – multi discipline approach
AUDIT
• Reviewing financial
accountability
on behalf of third parties
• Corporate governance
• Assessing strategy,
business risks
and implications for the
financial statements
• Center of excellence for
international holding and
finance audits
TAX
• All the different areas
of the tax field,
including corporation,
income, turnover and
wage tax
• Tax Innovation Centre
ADVISORY
• Transactions &
Restructuring
• Risk Consulting
• Management consulting
• Import duties,
international executive
services, immovable
property tax and
environmental levies,
succession planning
and transfer pricing
High Growth Markets desk – Africa
One point of contact covering all services and client related matters
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
4
The
Netherlands, an
overview &
European hub
The Netherlands
Netherlands Facts & Figures
Netherlands facts and figures
Area:
41,528 sq km (water: 7,643 sq km; land:
33,883 sq km of which forest 3,447 sq km)
Five largest cities (November 2013):
Amsterdam (capital) – population 810,084
Rotterdam – population 618,279
The Hague (seat of government) –
population 508,480
Utrecht – population 327,834
Eindhoven – population 221,101
Climate:
Temperate; marine; cool summers and mild
winters
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
6
The Netherlands
Netherlands Facts & Figures
Natural resources:
Natural gas, petroleum and arable land
Population (January 2014):
16,825,618
Age structure (2013)
0-24 years: 29.3%
25-64 years: 53.7%
65 years and older: 17.0%
Currency:
Euro (EUR)
Transportation infrastructure (2013)
Roadways: 139,295 km
Railways: 3,013 km
Waterways: 6,237 km
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
7
The Dutch economy
The recent financial crisis has had a strong impact on the Dutch economy
The financial crisis led to economic
downturn. Only now the economy is
slowly starting to recover
■ Sluggish economic growth of 0,5% is
forecasted for 2014, in 2015 the growth pace
will likely pick up to 1,5%.
■ In comparison to neighbouring countries, e.g.
Germany, the Netherlands was slow to
recover from the economic downturn.
And Netherlands suffered serious drop in
consumer confidence
■ As in other countries, the Dutch financial
sector was not able to withstand the global
financial crisis and the state intervened to
prevent its collapse
Economic growth in the Netherlands
GDP, in % quarter-on-quarter
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
I II III IV I II III IV I II III IV I II III IV I II III IIII I II III IIII
2008
2009
2010
2011
2012
2013
■ First indications of Netherlands economy
picking up again and faster than European
average
■ Current growth is mainly export driven.
Source: Economist Intelligence Unit, ING
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
8
Political developments
Making the shift from welfare state to ‘participation society’
Prince day 2013 – The concept of
participation society was introduced last
year and means to change the way people
perceive services provided by the state
■
The recent economic downturn led to a
downsizing of the welfare state, in order to
control government expenditures. But reforms of
the welfare state should lead to more sustainable
government finance in the long term as well
■
The participation society is supposed to
introduce a changing mindset. Citizens in need
should no longer expect the state to solve their
problems, but should first involve their own social
network to come up with a solution. The state
should create conditions that enable citizens to
undertake action themselves (similar to
Cameron’s ‘Big society’)
■
This is in line with previous governments that
have sought to create a smaller state. Due to the
ageing population many welfare arrangements
are increasingly unsustainable and thus require
an overhaul
■
Participation society was proclaimed the word of
the year for 2013
Prince day 2014 –
Expectations are that on average there will
be a (small) increase in personal income.
And the there will be a focus going
forward on creating more jobs.
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
9
The Dutch economy
Both the standard of living and overall wellbeing are high, also compared to
other EU countries
Income per capita
Feeling good
(GDP per capita, PPP, average= 100)
(Better Life Index, 2012)
Life is
GREAT!
That is 6% higher
than the German
average
Average
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
10
The Dutch economy is based on strong fundamentals, but there is room
for improvement
+
Plus
Ranking competitiveness
■ Quality of life
1
■ Telecom / internet infrastructure
2
■ Transport & logistical infrastructure
3
■ Stable social and political climate
4
■ Local labor skills
5
■ Good competitive position of the country
6
5
7
7
-
Minus
■ Relative small domestic market
■ Size of the government sector
■ Graying of the population
■ High labor costs
8
8
8
8
9
10
10
11
10
11
12
2006 2007 2008 2009 2010 2011 2012 2013
■ Inflexible labor market
■ Open economy
Source: World Economic Forum
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
11
Competitive Position Netherlands and Amsterdam
The Netherlands
Global Competitiveness Index (WEF)
#8(2013)
Global business environment rankings (EIU) #16 (2014-17)
Innovation
Ambition top-5
Technological readiness
#4 (2013)
Ease of Doing Business
#28 (2014)
Education (OECD PISA)
#10 in mathematics, #15 in reading, # 14 in science (2012)
KPMG: Competitive Alternatives 2012
Lowest Cost Level in Continental Europe
Amsterdam
Cushman & Wakefield’s European Cities
Monitor
#4 (2011)
Most livable city
#2 (2012)
IBM: Global LocationTrends Report
#14 (2012)
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
12
Netherlands: Strong sectors
Agri-food
Horticulture and
propagation materials
High Tech
Energy
Logistics
Creative Industry
Life sciences
Chemicals
Water
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
13
Netherlands – European Business Hub: Home to Global and regional
HQ’s
13 Dutch Multinationals belong to
Fortune 500 (incl Shell, Unilever, Philips
and Aegon)
More than 400 US companies and more
than 300 Asian companies have
established EHQ’s in the Netherlands
More than 5000 foreign based
companies operate in the Netherlands
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
14
Netherlands: A European Business Hub
Why:
• Open economy – long history with
working with foreign companies
Most often used for activities:
• Sales and marketing
• Infrastructure and Logistics
• Dependent on investments – so focused
on creating the right legislation and
infrastructure
• Holding/Finance/Treasury
• Intellectual Property and R&D
• Strategic location and specialised in
logistics
• EU Regional HQ/Management Centre
• Favourable fiscal climate
• Specialised industry with trust offices,
specialised (tax) lawyers and auditors
• High level of education with focus on
innovation
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
15
Netherlands: A European Business Hub – further information
Contents of Investment in the
Netherlands app 2014
■ Business environment in Netherlands
■ Starting or acquiring a business in the
Netherlands
■ Incentives (government grants and other facilities)
■ Reporting, audit and regulatory environment
■ Business taxation
■ Logistical services and customs
2014 version available in App store
under “Invest in NL”
Or on website:
http://www.meijburg.com/publications/inves
tment-in-the-netherlands-2013-en
■ Immigration, employment and personal tax
■ Exit matters
In total 232 pages of useful and detailed
information on “Investing and Trade in the
Netherlands & Netherlands the gateway to
Europe”
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
16
Netherlands: A Business Hub – proven track record with Africa
Did you know?
There are currently > 1.300 global companies based in the Netherlands holding
investments in Africa
We invite you to do the same and start using the Netherlands as hub for your
investments in Europe & the rest of the world
For further credentials on sectors and experiences of other companies: www.nfia.nl
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
17
Tax Meijburg
The Netherlands
a tax update
Jens Karreman
Tax update the Netherlands
Highlights of the Dutch tax system
Domestic
International
•
25% Corporate income tax rate (20% if
taxable amount < EUR 200,000)
•
Large tax treaty network and application
EU directives
•
Fiscal Unity Regime (tax consolidation)
•
100% Participation exemption (dividends,
foreign exchange results and capital
gains)
•
5% Effective tax rate on qualifying
innovative income
•
Expat Exemption (“30% ruling”) and tax
return filing exemption
•
60% Research & Development Deduction
•
White listed jurisdiction
•
No stamp duties / capital contribution / net
wealth tax
•
•
No withholding tax on interest, royalties,
technical fees
Effective centralized and coordinated
practice to obtain certainty in advance
through rulings with Dutch tax authorities
•
Facilities available for business transfer to
the Netherlands for Greenfield projects
(i.e. informal capital approach).
•
Dividend withholding tax: 15%, 0% for
cooperatives
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
20
Tax update the Netherlands
Also a competitive legal edge …
•
Proven track record in investment
protection
•
Large Treaty Network available
•
Excellent legal infrastructure
•
Quality & independency courts
•
Company law robust, yet flexible
•
Quality work force
•
•
•
Stable political environment
•
Good logistic infrastructure
•
Sea ports Rotterdam, Amsterdam
•
Schiphol airport
•
Experienced high quality service
providers
Well trained and skilled labour force
•
Competitive fiduciary service providers
Multi lingual
•
Tax / legal service providers
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
21
Tax update the Netherlands
Dutch innovation box
WHY
WHAT
HOW
SAVINGS
20%
1
Analysis Innovative
Character
2
Quantify Savings
3
Ruling tax authorities
Effective tax rate of 5%

Innovative income taxed at effective rate of 5%

No limit

Available for all industries
Innovation as wide scoped term (not only true
R&D, but any innovation that results in
efficiencies or enhanced performance)


Development costs deductible at 25%
Entry tickect – S&O certificate or Patent; and


Self produced

Unique track record with negotiating rulings with
the Dutch tax authorities

Ruling provides certainty as to tax effects and
what part of income can be qualified as innovative
income
An Example
Tax
EBT
100
80
20
Tax 25
Profit from entrepreneurial functions +
profit from innovation
Routine functions
Income for Innovation box
Inno-vation
box
2
40
40
Income at normal rate
Normal tax
15
(40 @ 5%)
(60 @ 25%)
Tax
17
Saving
8
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
22
An extensive Tax Treaty network…
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
23
as well as Investment Protection Treaty network...
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
24
Basic holding structure
Dutch participation exemption
General rules
Holdco
•The Dutch participation exemption applies to
(non transparent) shareholdings of at least 5% unless these can be qualified
as “low taxed passive investments”
Dividends
•All benefits exempt for 100% - dividends, forex and capital gains
•Losses not tax deductible (exception: liquidation losses)
Dutch Holdco (Cooperative)
Full exemption ≥ 5%
•Expenses tax deductible (exception: acquisition / disposal costs)
•A “Cooperative” is not subject to dividend withholding tax, unless the
participant in the Cooperative is a passive investor and the use of the
cooperative can be regarded “abusive”
Dividends and
capital gains
•Substance requirements apply
Advance certainty from tax authorities available (Advance
Tax Ruling)
Foreign Co’s
Foreign Co’s
Foreign Co’s
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
25
Basic financing structures
Foreign GroupCo
Dutch FinCo
Foreign GroupCo
Provision of loan
General rules
•
Access to the vast tax treaty network of the Netherlands
•
Credit for foreign withholding tax on interest on incoming interest payments
•
No Dutch withholding tax on outgoing interest payments
•
Low taxable spread
•
Substance requirements to be met – Sanction: Exchange of information to
source country
•
APA available
•
Mutual Agreement Procedure protection available
Advance certainty from tax authorities available (Advance
Pricing Agreement)
© 2014 KPMG N.V ., registered with the trade register in the Netherlands under number 34153857, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. Printed in the Netherlands.
26
Thank you!
Q&A
© 2014 KPMG N.V ., registered with the trade register in
the Netherlands under number 34153857, is a subsidiary of
KPMG Europe LLP and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (‘KPMG International’), a Swiss
entity. All rights reserved. Printed in the Netherlands.
The KPMG name, logo and ‘cutting through complexity’ are
registered trademarks of KPMG International.