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Financial administration & outsourcing
Entrepreneurs who outsource financial administration reduce the number of administrative tasks and consequently have more time and space to focus on growth.
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Financial insight
We help you turn financial data into valuable insights that support you in making well-founded decisions. In-depth analyses of your financial situation will help give you a better idea of where you stand and where the opportunities for growth lie, both in the short and long term.
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Financial compliance
We make sure your company complies with financial legislation and regulations, with correct financial statements, tax reports and other obligations. From our global network, we support you in managing local and international tax risks.
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Impact House by Grant Thornton
Building sustainability and social impact. That sounds good. But how do you go about it in the complex world of stakeholders, regulations and frameworks and changing demands from clients and society? How do you deal with important issues such as climate change and biodiversity loss?
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Business risk services
Minimize risk, maximize predictability, and execution Good insights help you look further ahead and adapt faster. Whether you require outsourced or co-procured internal audit services and expertise to address a specific technology, cyber or regulatory challenge, we provide a turnkey and reliable solution.
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Cyber risk services
What should I be doing first if my data has been kidnapped? Have I taken the right precautions for protecting my data or am I putting too much effort into just one of the risks? And how do I quickly detect intruders on my network? Good questions! We help you to answer these questions.
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Deal advisory
What will the net proceeds be after the sale? How do I optimise the selling price of my business or the price of one of my business activities?
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Forensic & integrity services
Do you require a fact finding investigation to help assess irregularities? Is it necessary to ascertain facts for litigation purposes?
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Valuations
Independent and objective valuations tailored for mergers, acquisitions, and legal matters.
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Auditing of annual accounts
You are answerable to others, such as shareholders and other stakeholders, with regard to your financial affairs. Financial information must therefore be reliable. What is more, you want to know how far you are progressing towards achieving your goals and what risks may apply.
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IFRS services
Financial reporting in accordance with IFRS is a complex matter. Nowadays, an increasing number of international companies are becoming aware of the rules. But how do you apply them in practice?
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ISAE & SOC Reporting
Our ISAE & SOC Reporting services provide independent and objective reports on the design, implementation and operational effectiveness of controls at service organizations.
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National tax advice
Looking for tax advice in the Netherlands? We help business owners with tailor-made tax advice: from structure and compliance to innovation and sustainability.
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International tax advice
Plan to do business abroad? Our international tax advice helps you with structure and compliance, as well as offering new opportunities. Strategic, practical, and future-oriented.
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Private wealth services
Our Private Wealth specialists offer strategic and practical solutions. From tax advice to estate planning and financial scenarios, we make sure you make the right choices today, for tomorrow.
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Corporate Law
From the general terms and conditions to the legal strategy, these matters need to be watertight. This provides assurance, and therefore peace of mind and room for growth. We will be pro-active and pragmatic in thinking along with you. We always like to look ahead and go the extra mile.
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Employment Law
What obligations do you have with an employee on sick leave? How do you go about a reorganisation? As an entrepreneur, you want clear answers and practical solutions to your employment law questions. At Grant Thornton, we are there for you with clear advice, from contracts and terms of employment to complex matters such as dismissal or reorganisation.
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Sustainable legal
At Grant Thornton, we help companies integrate sustainability into their business operations, with sustainable legal at the heart of our approach. We advise on ESG (Environmental, Social, Governance) legislation, and help draft sustainable contracts, implement HR policies, and carry out ESG due diligence in M&A transactions (Mergers and Acquisitions).
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HR Services
HR is not an aspect of secondary relevance, rather a strategic factor for success. Yet many organisations struggle with issues regarding personnel policy, absenteeism, terms of employment and legislation and regulations.
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Payroll & wage tax
Payment of salaries is not a simple calculation. Laws and regulations constantly change, and mistakes can quickly cause employees to be dissatisfied or lead to tax risks.
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Compensation and benefits
The labour market is changing rapidly. Employees want flexibility, a sense of purpose and a good mixture of financial and non-financial benefits.
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Pension advisory services
Pension is more than an obligation. It is a strategic term of employment that touches upon your employer brand, financial scope and responsibility to provide for your employees.
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Global mobility services
How can you build and evolve a smart global mobility strategy, with policies and processes addressing the complex challenges of managing an international workforce?
Tax residency
It is possible that both the Netherlands and Belgium consider an entity as their tax resident. In order to avoid double taxation, the Netherlands and Belgium must determine the tax residency for tax treaty purposes. Older tax treaties usually specify that this is determined by the effective place of management. Under the new treaty with Belgium, the effective place of management remains the determining factor. This is surprising, as the Netherlands expressed its preference to include a mutual agreement procedure in order to determine the tax residency. The downside of this is that only after this procedure is closed, avoidance of double taxation can be claimed.
Permanent establishment
Dutch companies can become taxable in Belgium when these companies obtain income in Belgium through a permanent establishment. Several changes have been made to the permanent establishment definition. The most important reason for these changes is to prevent companies from structuring their activities in such a way that these no longer fall under the definition of a permanent establishment.
We have highlighted the most important changes to the permanent establishment definition below.
Permanent representative
Based on the current treaty, a company is deemed to have a permanent establishment if a person – other than an agent of an independent status - is acting on behalf of an enterprise and has, and habitually exercises, an authority to conclude contracts on behalf of the enterprise, the so-called ‘permanent representative’.
In the new tax treaty, this definition is broadened. In addition to the definition as described above, persons who habitually play the principal role leading to the conclusion of contracts will be considered permanent representatives under the new tax treaty. This is in line with the OECD definition.
Construction site or installation project
A construction site or installation project is considered a permanent establishment if the duration of the activity exceeds twelve months.
To avoid exceeding the twelve-month threshold and thus be considered a permanent establishment, companies could split the activities between related companies.
To prevent this, a new provision was added to the treaty. Based on the new provision, activities carried out on the same construction site or installation project by closely associated companies will be combined to determine the total duration of the project.
Preparatory or auxiliary activities
Activities which are considered as preparatory or auxiliary are not considered a permanent establishment. Under the current treaty companies can split their activities between related companies to avoid a permanent establishment. To prevent this fragmentation of activities, a new provision has been added, which states that the activities of closely associated companies in the same country have to be taken into account to determine if activities are preparatory or auxiliary.
Recommendations
If your company has employees or activities in Belgium, we recommend reviewing the current tax position of your company regarding the new permanent establishment rules. We would be happy to assist you with this further review.
Profit corrections leading to double taxation
The new Article 7(3) stipulates that when a country applies an adjustment to the profits attributable to a permanent establishment that results in double taxation, the other State also applies an adjustment, unless it disagrees with the correction. Then this should be resolved by mutual agreement between both countries.
Dividend withholding tax
The current tax treaty with Belgium allows the Netherlands and Belgium to impose a 15% withholding tax unless the dividend is paid to parent company which holds more than 10% of the shares in the subsidiary. In that case, the dividend withholding tax rate must be reduced to 5%.
In the new treaty, the lowest acceptable withholding tax rate will be 0% instead of 5%. The reduced rate of 0% is only applicable when the parent company holds an interest of at least 10% in the subsidiary for at least 365 days.
If the reduced rate is applicable, the new tax treaty will lead to a reduction of dividend withholding tax from 5% to 0%. However, if the new requirement of holding the 10% interest for at least 365 days is not met, the reduced rate is not applicable. The dividend withholding tax will then increase from 5% to 15%. It is therefore important to assess whether the reduced rate of dividend withholding tax will apply.
Interest payments
Under the current tax treaty with Belgium, the Netherlands and Belgium are allowed to impose a maximum withholding tax on interest payments of 10% on interest payments to the beneficiaries in the other country. In the new tax treaty, it is specified that only the State of the recipient of interest may impose taxation on the interest. In principle, no withholding tax may be imposed (unless there is abuse).
Other income
In most tax treaties it is specified that income that does not fall within the scope of specific provisions in the tax treaty, may only be taxed in the country of the recipient of the income. That also applies to the current and future tax treaties with Belgium. On top of this existing measure, there is a new anti-abuse measure in this category of income. This anti-abuse rule specifies that when the income is derived from assets or income components that were not effectively taxed in the other State, the State of the recipient is allowed to impose taxes.
Anti-abuse
A new general anti-abuse provision has been added to the treaty. Treaty benefits will not be granted if one of the principal purposes of a transaction or structure is to obtain a tax treaty benefit. The exception to this rule is when the granting of the benefits is in line with the purpose and intent of the relevant treaty provision. This is the implementation of the principle purpose test in the tax treaty with Belgium. Which is in line with the latest OECD Model Convention.
Way forward
The new tax treaty will affect companies with cross-border activities in Belgium. It is therefore important to assess how the abovementioned changes will impact your business. We would be happy to assist with this assessment. Please contact us if you would like to receive more information in this regard.