U.S. entrepreneurs operating in the Netherlands under the DAFT visa must comply with Dutch tax rules. This typically includes:
• Personal income tax or corporate income tax
• VAT registration and filings (if applicable)
• Proper bookkeeping and financial reporting
• Possible U.S. tax reporting obligations
NetherBridge Partners supports DAFT entrepreneurs with company formation, accounting, tax compliance and advisory services to ensure their business operates smoothly in the Netherlands.
DAFT and Taxes
The Dutch American Friendship Treaty (DAFT) provides U.S. citizens with a unique opportunity to live and run a business in the Netherlands. For many American entrepreneurs, it is one of the most accessible pathways to enter the European market.
While the immigration process is relatively straightforward, operating a business in the Netherlands under the DAFT visa also means complying with Dutch tax and accounting obligations. Understanding these rules early is essential for building a stable and compliant business.
This guide explains how taxation works for DAFT entrepreneurs in 2026, including corporate taxes, income taxes, VAT obligations and key compliance considerations.
How Taxes Work Under the DAFT Visa
The DAFT visa itself does not provide special tax exemptions. Once a business is established in the Netherlands, it is subject to the same tax rules as any other Dutch business.
However, tax treatment depends largely on the legal structure chosen by the entrepreneur.
Two structures are most common among DAFT applicants:
• Sole proprietorship (eenmanszaak)
• Dutch private limited company (BV)
Each structure has different tax implications.
Sole Proprietorship Taxation
Many DAFT entrepreneurs initially operate as a sole proprietor. In this case, business income is taxed as personal income under the Dutch income tax system.
The Netherlands uses a progressive income tax system. For 2026, personal income tax in Box 1 generally applies to business profits and employment income.
Entrepreneurs may benefit from several deductions if they meet eligibility requirements, such as the self-employed deduction or startup deduction.
However, these benefits depend on factors such as the number of hours worked in the business and the entrepreneur’s tax residency status.
Corporate Tax for Dutch BV Structures
Many entrepreneurs choose to operate through a Dutch BV because it offers limited liability and is often more suitable for scaling a business.
When operating through a BV, the company itself becomes a separate taxpayer.
As of 2026, Dutch corporate income tax rates are:
• 19 percent on profits up to €200,000
• 25.8 percent on profits above €200,000
Profits distributed to the shareholder may also be subject to dividend taxation.
Choosing between a sole proprietorship and a BV requires careful planning, as it affects both taxation and governance.
VAT Obligations
Most businesses in the Netherlands must register for Value Added Tax (VAT).
VAT applies to goods and services sold within the Netherlands and across the European Union. The standard VAT rate is 21 percent, with reduced rates applying to certain products and services.
DAFT entrepreneurs must typically:
• Issue VAT-compliant invoices
• File periodic VAT returns
• Maintain proper VAT records
Failure to manage VAT correctly can result in penalties and administrative complications.
U.S. Tax Obligations
American entrepreneurs must also remember that the United States taxes its citizens on worldwide income.
This means DAFT entrepreneurs may have tax obligations in both the Netherlands and the United States.
Fortunately, tax treaties and foreign tax credit rules often prevent double taxation. However, proper planning and reporting are essential.
Common U.S. reporting obligations may include:
• Foreign bank account reporting
• Foreign income disclosures
• U.S. federal tax filings
Coordination between Dutch and U.S. tax compliance is therefore important.
Accounting and Record-Keeping Requirements
All Dutch businesses must maintain proper bookkeeping.
Entrepreneurs must keep accurate financial records, including invoices, contracts and bank statements. These records must generally be retained for seven years.
Proper accounting ensures:
• Accurate tax filings
• Compliance with Dutch regulations
• Clear financial visibility for business growth
Many DAFT entrepreneurs choose professional accounting support to manage these requirements efficiently.
Common Tax Challenges for DAFT Entrepreneurs
American entrepreneurs often face challenges when entering the Dutch tax system.
Typical issues include:
• Choosing the wrong business structure
• Misunderstanding VAT obligations
• Delays in bookkeeping or tax filings
• Lack of coordination between U.S. and Dutch tax reporting
These issues can be avoided with proper planning and professional guidance.
How NetherBridge Partners Supports DAFT Entrepreneurs
NetherBridge Partners works with international founders and U.S. entrepreneurs establishing businesses in the Netherlands.
Our services include:
• Company formation and corporate structuring
• Accounting and bookkeeping services
• VAT registration and reporting
• Corporate and personal tax compliance
• Financial reporting and audit preparation
• Strategic advisory for growing international businesses
By combining accounting, tax, legal and advisory services under one roof, we help entrepreneurs focus on building their companies while ensuring full compliance.
Final Thoughts
The Dutch American Friendship Treaty offers a powerful opportunity for U.S. entrepreneurs to establish a business in Europe. However, success under the DAFT program requires careful attention to tax compliance and financial administration.
Understanding how Dutch taxes work, selecting the right business structure and maintaining proper accounting practices are essential for long-term stability.
With the right guidance, the Netherlands can serve as a strong and strategic base for international growth.
If you are a U.S. entrepreneur considering the DAFT visa or already operating a business in the Netherlands, NetherBridge Partners can help you navigate the legal, accounting and tax landscape with confidence.
