Thanks for the clarification. Granted, I oversimplified. The 52% is for everything over ~50K. As a business owner, however, you pay this income tax on top of 20%/25% corporate taxes.
If you make a 100.000 euro profit and extract it from your business the company pays 20% corporate tax (that is the rate below 200.000 euro profit), leaving you with 80,000. That remainder is taxed as follows: http://en.wikipedia.org/wiki/Income_tax_in_the_Netherlands. This leaves you with 46.408 euro from your original 100.000 (using the rates that include mandatory pension, social security and State funded medical care payments).
Please correct me if I'm wrong, I'm far from a tax specialist.
Of course, you also have to pay all sorts of other taxes with the remainder, including municipal taxes, a hefty value added tax on most things you buy and property taxes. In return you get the ability to subtract part of your mortgage from your taxes, as well as a government that takes care of you (if you want it or not) when it comes to social security or affordable health care.
EDIT: If you sell a company as a resident of the Netherlands you also get taxed quite heavily, but there are ways to mitigate part of that (e.g. using a holding company, so you don't have to pay income tax directly over the money you get for your shares). If you're moving here to start a business, I would suggest consulting a tax advisor or lawyer before you make any decisions or file paperwork.
Actually the Netherlands has amazing tax incentives for technology companies. It's quite common for tech companies here to pay essentially no payroll taxes. Things like VAT passthrough are also a huge tax break.
You are not a tax expert. I understand that. We actually do have tax experts, who are available to Appsterdammers, and are working on a nice write up of this information for publication in the near future.
"The 52% is for everything over ~50K. As a business owner, however, you pay this income tax on top of 20%/25% corporate taxes."
No you don't. You pay 52% wage tax in the upper bracket, but in that case it's not taxed for corporate tax since it's an expense. The companies profit is taxed at 23%, and if you pay dividend to the shareholder(s), then they pay another 22 or so percent dividend tax, making the total tax pressure roughly equal to the top income tax bracket, leaving aside special arrangements like starter deductions, WBSO subsidies etc.
No worries. I still roughly agree with your point that it's too expensive to do business here. That said, compared to the rest of Europe .nl is quite ok for technology companies (especially software) but only for people who actively go out and search for lawyers and accountants who know about the many special situations for IP creation deductions, R&D subsidies etc. Plus one needs to take advantage of EU freedom of establishment rules to move profits abroad for maximum tax optimization. A software company can optimize to only pay a fraction of the taxes what a plumber or widget manufacturer would pay. (and still legal)
If you make a 100.000 euro profit and extract it from your business the company pays 20% corporate tax (that is the rate below 200.000 euro profit), leaving you with 80,000. That remainder is taxed as follows: http://en.wikipedia.org/wiki/Income_tax_in_the_Netherlands. This leaves you with 46.408 euro from your original 100.000 (using the rates that include mandatory pension, social security and State funded medical care payments).
Please correct me if I'm wrong, I'm far from a tax specialist.
Of course, you also have to pay all sorts of other taxes with the remainder, including municipal taxes, a hefty value added tax on most things you buy and property taxes. In return you get the ability to subtract part of your mortgage from your taxes, as well as a government that takes care of you (if you want it or not) when it comes to social security or affordable health care.
Note that there seems to be a tax reduction for certain foreign workers (see: http://en.wikipedia.org/wiki/Income_tax_in_the_Netherlands#T...). Also see http://en.wikipedia.org/wiki/Corporate_Tax_in_the_Netherland... for corporate tax rates.
EDIT: If you sell a company as a resident of the Netherlands you also get taxed quite heavily, but there are ways to mitigate part of that (e.g. using a holding company, so you don't have to pay income tax directly over the money you get for your shares). If you're moving here to start a business, I would suggest consulting a tax advisor or lawyer before you make any decisions or file paperwork.