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Investing and Trade in the Netherlands & Netherlands the gateway to Europe September 16, 2014.

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Presentation on theme: "Investing and Trade in the Netherlands & Netherlands the gateway to Europe September 16, 2014."— Presentation transcript:

1 Investing and Trade in the Netherlands & Netherlands the gateway to Europe September 16, 2014

2 1 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Agenda 1 2 Introduction 3 The Netherlands, an overview & European hub 4 The Netherlands, a tax update Q&A

3 2 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. With you here today Laurens Kreuze Head of high growth markets – Africa Jens Karreman Tax expert high growth markets Laurens H.A. Kreuze Partner, KPMG Accountants N.V. Laan van Langerhuize DS Amstelveen Phone: Mobile: Jens Karreman Partner, KPMG Meijburg & Co Prof.dr. Dorgelolaan 30D 5613 AM Eindhoven Phone: Mobile: Starting for KPMG Nigeria in Lagos per 1 November 2014

4 3 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. KPMG in the Netherlands 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 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 Global 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 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 KPMG in the Netherlands

5 4 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. 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 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 Import duties, international executive services, immovable property tax and environmental levies, succession planning and transfer pricing TAX All the different areas of the tax field, including corporation, income, turnover and wage tax Tax Innovation Centre Import duties, international executive services, immovable property tax and environmental levies, succession planning and transfer pricing ADVISORY Transactions & Restructuring Risk Consulting Management consulting ADVISORY Transactions & Restructuring Risk Consulting Management consulting High Growth Markets desk – Africa One point of contact covering all services and client related matters High Growth Markets desk – Africa One point of contact covering all services and client related matters

6 The Netherlands, an overview & European hub

7 6 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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 Netherlands 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 Netherlands Facts & Figures

8 7 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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 Netherlands Natural resources: Natural gas, petroleum and arable land Population (January 2014): 16,825,618 Age structure (2013) 0-24 years: 29.3% 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 Netherlands Facts & Figures

9 8 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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 Dutch economy The recent financial crisis has had a strong impact on the Dutch economy Economic growth in the Netherlands GDP, in % quarter-on-quarter Source: Economist Intelligence Unit, ING

10 9 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Political developments Making the shift from welfare state to ‘participation society’ 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.

11 10 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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 Dutch economy Both the standard of living and overall wellbeing are high, also compared to other EU countries Income per capita (GDP per capita, PPP, average= 100) (Better Life Index, 2012) Average That is 6% higher than the German average Feeling good Life is GREAT!

12 11 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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 Dutch economy is based on strong fundamentals, but there is room for improvement Source: World Economic Forum

13 12 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Competitive Position Netherlands and Amsterdam The Netherlands Global Competitiveness Index (WEF)#8(2013) Global business environment rankings (EIU)#16 ( ) InnovationAmbition 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 2012Lowest 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)

14 13 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Netherlands: Strong sectors Agri-food Horticulture and propagation materials High Tech Energy Logistics Creative Industry Life sciences Chemicals Water

15 14 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. 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

16 15 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Netherlands: A European Business Hub Most often used for activities: Sales and marketing Infrastructure and Logistics Holding/Finance/Treasury Intellectual Property and R&D EU Regional HQ/Management Centre Sales and marketing Infrastructure and Logistics Holding/Finance/Treasury Intellectual Property and R&D EU Regional HQ/Management Centre Why: Open economy – long history with working with foreign companies Dependent on investments – so focused on creating the right legislation and infrastructure Strategic location and specialised in logistics Favourable fiscal climate Specialised industry with trust offices, specialised (tax) lawyers and auditors High level of education with focus on innovation Open economy – long history with working with foreign companies Dependent on investments – so focused on creating the right legislation and infrastructure Strategic location and specialised in logistics Favourable fiscal climate Specialised industry with trust offices, specialised (tax) lawyers and auditors High level of education with focus on innovation Other advantages Lower cost of operation than other countries Availability of different corporate governance regimes, which offer possibility to create most appropriate set up Other advantages Lower cost of operation than other countries Availability of different corporate governance regimes, which offer possibility to create most appropriate set up

17 16 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. 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 ■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 version available in App store under “Invest in NL” Or on website: tment-in-the-netherlands-2013-en 2014 version available in App store under “Invest in NL” Or on website: tment-in-the-netherlands-2013-en

18 17 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Netherlands: A Business Hub – proven track record with Africa Did you know? There are currently > global companies based in the Netherlands holding investments in Africa Did you know? There are currently > 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:

19 Tax Meijburg

20 The Netherlands a tax update Jens Karreman

21 20 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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% Corporate income tax rate (20% if taxable amount < EUR 200,000) Fiscal Unity Regime (tax consolidation) 5% Effective tax rate on qualifying innovative income 60% Research & Development Deduction No stamp duties / capital contribution / net wealth tax No withholding tax on interest, royalties, technical fees Dividend withholding tax: 15%, 0% for cooperatives Large tax treaty network and application EU directives 100% Participation exemption (dividends, foreign exchange results and capital gains) Expat Exemption (“30% ruling”) and tax return filing exemption White listed jurisdiction 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). DomesticInternational Tax update the Netherlands Highlights of the Dutch tax system

22 21 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Excellent legal infrastructure Quality & independency courts Company law robust, yet flexible Quality work force Well trained and skilled labour force Multi lingual Stable political environment Good logistic infrastructure Sea ports Rotterdam, Amsterdam Schiphol airport Experienced high quality service providers Competitive fiduciary service providers Tax / legal service providers Proven track record in investment protection Large Treaty Network available Tax update the Netherlands Also a competitive legal edge …

23 22 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. WHAT Innovation as wide scoped term (not only true R&D, but any innovation that results in efficiencies or enhanced performance) Entry tickect – S&O certificate or Patent; and Self produced Effective tax rate of 5% SAVINGS WHY 20% Innovative income taxed at effective rate of 5% No limit Available for all industries Development costs deductible at 25% HOW 1 Analysis Innovative Character 2 3 Quantify Savings Ruling tax authorities 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 Routine functions EBT 100 Profit from entrepreneurial functions + profit from innovation Income for Innovation box Income at normal rate Tax 25 Tax Inno- vation box 2 5%) Normal tax 15 25%) Tax17 Saving8 Tax update the Netherlands Dutch innovation box

24 23 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. An extensive Tax Treaty network…

25 24 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. as well as Investment Protection Treaty network...

26 25 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Basic holding structure Dutch participation exemption General rules The Dutch participation exemption applies to (non transparent) shareholdings of at least 5% unless these can be qualified as “low taxed passive investments” All benefits exempt for 100% - dividends, forex and capital gains Losses not tax deductible (exception: liquidation losses) 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” Substance requirements apply Advance certainty from tax authorities available (Advance Tax Ruling) ≥ 5% Dividends and capital gains Full exemption Foreign Co’s Dutch Holdco (Cooperative) Holdco Dividends

27 26 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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. Basic financing structures Provision of loan Foreign GroupCo Dutch FinCo 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) Foreign GroupCo

28 Thank you! Q&A

29 © 2014 KPMG N.V., registered with the trade register in the Netherlands under number , 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.


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