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Cyprus vs Netherlands: Tax Comparison for Founders
In the Netherlands, corporate tax and Box 2 dividend tax combine to reduce what you keep from your profit. Here is how 200,000 euros of profit is treated in the Netherlands versus Cyprus.
If you run a company in the Netherlands, the tax system works in two layers. Corporate tax takes the first share of profit, and Box 2 tax takes another share when you pay yourself a dividend. Combined, they reduce what you keep. Cyprus taxes the same profit once at 15% and, for non-domiciled residents, leaves the dividend almost intact. Here is how 200,000 euros of profit is treated in each country.
Netherlands vs Cyprus: the headline numbers
| Tax | Netherlands | Cyprus |
|---|---|---|
| Corporate income tax | 19% up to 200,000 euros, 25.8% above | 15% flat |
| Tax on dividends to the owner | Box 2: 24.5% up to a threshold, 31% above | 0% for non-dom residents (2.65% GHS, capped) |
| Dividend withholding tax | 15%, with treaty and EU directive relief | 0% to non-residents |
| Capital gains on share sale | Taxed under Box 2 | Exempt (unless Cyprus real estate) |
How the Netherlands taxes company profit
A Dutch BV pays 19% corporate tax on the first 200,000 euros of profit and 25.8% on anything above. That is the first layer.
When the owner takes profit out, it falls under Box 2, which taxes income from a substantial shareholding of 5% or more. The Box 2 rate is 24.5% up to a threshold and 31% above it. There is also a 15% dividend withholding tax, though it is creditable or relieved under treaties and the EU Parent-Subsidiary Directive.
200,000 euros of profit: a worked comparison
Take 200,000 euros of company profit and distribute all of it to the owner. The figures below are illustrative and ignore personal allowances and timing.
| Step | Netherlands | Cyprus (non-dom resident) |
|---|---|---|
| Profit | 200,000 | 200,000 |
| Corporate tax | 38,000 (19%) | 30,000 (15%) |
| Profit after corporate tax | 162,000 | 170,000 |
| Tax on distribution | ~39,700 (Box 2 at 24.5%) | ~4,505 (2.65% GHS, capped) |
| Kept by the owner | ~122,300 | ~165,500 |
The corporate rates are not far apart. The difference is the second layer.
These are simplified figures to show the shape of the two systems. The exact Dutch result depends on the Box 2 thresholds and your other income; the Cyprus result depends on the healthcare contribution cap and your residency status.
How Cyprus taxes the same profit
A Cyprus company pays 15% corporate tax. After that:
- No withholding tax applies to dividends paid to non-residents.
- A non-domiciled Cyprus tax resident pays no income tax or Special Defence Contribution on dividends.
- The only charge is the General Healthcare System contribution at 2.65%, capped at 180,000 euros of annual income.
Comparing the Netherlands and Cyprus?
Our corporate and tax team can model both systems against your real numbers. Book a consultation to see what you would keep.
What actually changes the outcome
Both countries are credible EU holding jurisdictions with participation exemptions. The Netherlands has one of the largest treaty networks in the world; Cyprus has lower effective taxation on distributed profit for non-dom residents and 0% outbound withholding tax.
The right choice depends on the group structure, where you are tax resident, and whether the Cyprus company has genuine substance. For how a Cyprus holding structure is built, see why Cyprus works as a holding company jurisdiction, or contact us to compare the two for your business.
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Sergios Charalambous
Partner
Partner specializing in corporate and tax law. Member of both the Cyprus Bar Association and the Athens Bar Association, bringing expertise across both jurisdictions.
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