Last updated 07/20/2026
One of the most common misconceptions among international entrepreneurs is the belief that incorporating a Dutch company automatically makes it a Dutch tax resident for all tax purposes. In reality, determining a company’s tax residence is often more nuanced and can have significant implications for corporate taxation, VAT obligations, substance requirements, and international tax compliance.
Whether you are establishing a Dutch B.V., operating through a foreign holding structure, or expanding into Europe, understanding where your company is considered tax resident is essential. Getting it wrong can result in unexpected tax exposure, compliance issues, and challenges with banks, tax authorities, and business partners.
In this article, we explain what tax residence means, how it differs from VAT registration, and what factors determine whether a company is considered tax resident in the Netherlands.
Board Members/Partners Live Abroad
Numerous court cases have discussed how the location of a business is determined by the seat of business operations. The location of business operations can be determined based on the country of residence of the board members who make daily business decisions. In the case of a General Partnership (VOF), the Partners’ country of residence may be deemed decisive unless the Partnership is effectively managed from the Netherlands.
Main Factors Regarding Seat Location
According to earlier European case law, various factors must be considered when determining a corporate entity’s tax residency. The most important is the registered office, which is the location of central management, where the company’s directors meet, and where the general policy of the company is determined.
In fact, we have seen that it can be important for VAT purposes if the company engages in any activities in the Netherlands, such as dealing with Dutch suppliers or customers.
Furthermore, if the company lacks a fully functional office or warehouse, this could lead some people to believe that it is not really operating in the Netherlands. Although using a “registered office” is permitted legally, there may be limitations when it comes to taxes; nevertheless, this will depend on the overall circumstances of the firm. Technically, even if a fully functional office is not present, it is nevertheless feasible to be treated as a tax resident in the Netherlands, for instance when a business collaborates with third parties like a shipping or storage provider.
Please contact us at launch@bolderlaunch.com / corporate@bolderlaunch.com or +31 76 230 0011 to learn more about how we can help expand your business in the Netherlands. We are more than happy to assist with guidance!
The publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No presentation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Bolder Business Services (Netherlands) B.V., its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in reliance on the information contained in this publication or for any decision based on it.
