The Netherlands is a founding member of the European Union located in Northern Europe.
Economy of the Netherlands is very diversified with the main sectors ranging from a highly mechanised agricultural sector and fishing to metal and engineering products, electronic machinery and equipment, chemicals, petroleum, construction, and microelectronics. Due to the strategic geographic location of the Netherlands, other important parts of the economy are those gaining agvantages from the Netherlands' location: international trade, banking and transport.
The Netherlands has a favourable financial infrastructure with a long tradition in banking, retirement management, pension funds, investments and insurance products. In addition to the major Dutch banks such as ABN AMRO, ING, SNS Bank and Rabobank, the Netherlands houses branches of approximately 50 foreign banks.
Netherlands joined the Euro Area on 1 January 1999.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|697.2 bln EUR (+0.02%)||40 900 EUR (+0.02%)||2.2 % (2015: 2.3 %)|
According to Eurostat, nominal GDP of Netherlands in 2016 was 697.2 bln EUR.
Netherlands outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.1% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.2% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 1. Real GDP Growth in Netherlands. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Netherlands was 40 900 EUR.
Netherlands has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 27.6% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 2. GDP Per Capita at Purchasing Power Parity in Netherlands; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|-0.4 % (Aug 2017: 0.2 %)||1.4 % (Aug 2017: 1.5 %)||0.1 % (2015: 0.2 %)|
According to Eurostat, inflation rate in Netherlands in 2016 expressed as annual percentages of average consumer prices was 0.1% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 3. Inflation Rate in Netherlands. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|6.0 % (2015: 6.9 %)|
|Government Bond Yield (Sep 2017)|
|0.53 % (Aug 2017: 0.54 %)|
Chart 4. Government bond yield of Netherlands. Source: Eurostat.
|AAA (highest credit quality), outlook stable||Aaa (prime), outlook stable|
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Netherlands are shown in Table 1.
|Natural person, resident||15.0 %||0.0 %|
|Natural person, non-resident||15.0 %||0.0 %|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Netherlands signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Netherlands and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Netherlands signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Netherlands and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Netherlands signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
the Netherlands has signed bilateral agreements with 57 jurisdictions to automatically receive information:
the Netherlands has signed bilateral agreements with 69 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in the Netherlands|
|IGA in effect since 18 December 2013, Model 1|
Netherlands has FATCA agreement with the U.S. in effect since 18 December 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Netherlands are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: the Netherlands' financial accounts hold in U.S. financial institutions will be reported to the Netherlands' authorities.
|Financial Market Development|
|4.6 (max 7.0), 28th out of 138 countries|
|5.4 (max 7.0), 41st out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Netherlands is scored 4.6 out of maximum 7.0 and ranked 28th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.6 (50th place).
Chart 5. Financial Market Development in Netherlands. Source: WEF.
Soundness of banks is scored 5.4 bringing Netherlands into the 41st place.
Chart 6. Soundness of Banks in Netherlands. Source: WEF.
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Netherlands are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Netherlands, branches of non-EEA banks, branches of the Netherlands' banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Eligible Depositors||private individuals, small companies|
|Covered Accounts||nearly every payment or savings account, current account or term deposit is covered|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 2. Deposit guarantee scheme in Netherlands.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Euro)||Foreign Currency|
|Aaa (prime)||Aaa (prime)|
Local currency (Euro) deposit ceiling for Netherlands is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
|Average Deposit Rate (Aug 2017, EUR)|
|1.40 % (Jul 2017: 1.33 %)|
Chart 7. Deposit Rates in Netherlands. Source: ECB.
|Number of Banks|
|Consolidated Assets (2016)|
|2 532.98 bln EUR (+0.20%)|
|Recent Changes (2016)|
|new banks: 4, closed banks: 111|
Currently there are 99 credit institutions operating in Netherlands.
In 2016 consolidated banking assets in the Netherlands were 2 532.98 bln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.
Chart 8. Consolidated banking assets in Netherlands.
Recent structural changes (2013 - 2016) of the banking sector of Netherlands are summarised in Table 3.
|Number of Opened Banks||4||7||7||4|
|Number of Closed Banks||10||38||17||111|
Table 3. Recent structural changes in the banking sector of Netherlands.
The list of the most recently opened banks in Netherlands is provided in Table 4.
|UBS Europe SE, Netherlands Branch (new)||December 2016|
|J.P. Morgan Europe Limited (new)||October 2016|
|Credit Suisse (Luxembourg) S.A., Netherlands Branch (new)||May 2016|
|Intesa Sanpaolo Bank Luxembourg Amsterdam Branch (new)||April 2016|
|Bank Degroof Petercam SA (new)||December 2015|
|Bank of America Merrill Lynch International Limited (new)||October 2015|
|Citibank Europe Plc (new)||October 2015|
|Credit Suisse International (new)||October 2015|
|Maple Bank GmbH (closed)||August 2015|
|China Construction Bank (Europe) S.A. (new)||April 2015|
Table 4. The most recently opened banks in Netherlands.
All the credit institutions operating in Netherlands can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||50|
There are 50 branches of foreign banks from 12 different countries in Netherlands. Table 6 shows 10 countries having the biggest number of branches in Netherlands.
|Country of Origin||Number of Branches|