Meet the Co-chairs - TIAG
Mercer & Hole
Cohen & Company (Ohio)
Fineman West & Co. LLP
Meet the Co-chairs - TAGLAW
Williams Mullen (VA)
The main taxes in the UK are summarised below. The rates and comments are applicable to UK resident individuals and companies only.
Individuals are liable to income tax on their income from investments, businesses and employments. For the tax year 2004/05 (the year beginning 6 April 2004) the following rates apply:
Taxable income Rate
Â£0 - Â£2,020 10% (the starting rate)
Â£2,021 â€“ Â£31,400 22% (the basic rate)
Â£31,401 and over 40% (the higher rate)
Individuals resident in the UK for the tax year are
entitled to a standard deduction in calculating their taxable income. This is known as the personal allowance and is fixed at Â£4,745 for 2004/05. Additional allowances are available dependent upon age or disability.
The above rates of income tax are modified for interest and dividends. Interest from banks, building societies and government and company stocks is normally received after deduction of a lower rate of tax of 20%. Additional tax is payable if total income, including the gross interest, exceeds the higher rate threshold.
No tax is deducted at source on dividends paid from UK companies, but they carry a tax credit of 10%. A basic rate taxpayer has no further liability to income tax on dividends as the tax credit matches the UK
dividend rate of 10%. For higher rate taxpayers the dividend rate is 32.5%, and relief is given for the 10% tax credit.
This brochure is intended for Dutch-based companies that operate internationally and for international companies wishing to set up a business in the Netherlands. The brochure offers a general overview of the taxes to which companies in the Netherlands are liable.
When looking for a location for business, more and more companies base their decision on the tax system of the country in question. This is even more the case since the abolition of borders within the European Union in 1993 and the introduction of the euro in 12 countries in 2002. There are numerous other factors that also have an impact on a countryâ€™s business and investment climate, such as its geographic location, infrastructure, political and social stability and wage levels.
The Netherlands has a relatively small, but very open, economy. The Government has always acknowledged that the tax system should not constitute an obstacle to companies with international operations. This is reflected in the way in which corporate profits are taxed.
The Dutch Government is responsible for the administration of justice, policing,road construction and maintenance.It also provides assistance for people in financial difficulty, care for the elderly, housing subsidies and cultural subsidies. These are all tasks for which individual citizens or businesses are unwilling or unable to bear responsibility . However, they are indispensable elements of good public services. The Ministry of Finance raises the revenue required to perform these tasks and monitors spending.
It is also responsible for laws on taxation and for their implementation. A major branch ofthe Ministry ofFinance is the Tax Administration, which collects money from taxpayers ,in other words businesses and private citizens. This is done annually in the form of taxes and social security contributions. The Tax Administration also inspects taxes and investigates tax fraud.
Tax revenues are spent in line with the agreements reached by the governing coalition. These agreements are set out at the beginning of a parliamentary term in a document stating the Governmentsâ€™ policy priorities. These are the issues that will receive most attention and therefore most resources.