Contracting in the Netherlands

**Viking** · 4 January 2005, 15:56

Don't do it

Under no circumstances should you consider coming to Holland unless you've got work and only then consider it a temporary move just to get a taster for working in Europe.

There is large unemployment here at present and the rates are in the toilet. There is a very high standard of living here, especially in places like Amsterdam and The Hague. You will have to pay tax, there is now way around it and although you can apply for your 30% ruling, you will find that your Euro does not go as far as you would think. Accommodation costs are still very high and you'll be required to pay a bond. I have yet to hear of anyone leaving Holland and getting their bond back.

All agencies will require you to go through some sort of umbrella arrangement as there is a law here referred to as the "chain law" and although it has not been ratified by parliament, agencies insist on protecting themselves against it. Your money will be held back each month for withholding tax, NI and holiday pay (about 30%). You will have to take out insurances for sick pay and medical as there is no NHS here, however, you can use your E101 provided you are paying NI back in the UK you would then be required to pay employers and employees NI so you'll have to see whether it's worth it, although I think you can get 12 months cover if you should move to a European country, you can check this out with your accountant or the social security web site.

Many of the US/UK based companies that came here during the boom time have left and the Dutch companies will insist on an understanding of the Dutch language. It may not say so in the advert, but it will become a requirement after the agency receives 300 CVs.

Many Dutch are annoyed at the high levels of immigration which occurred during the late 80's (that's what all the recent high profile murders have been about). So they are not very forthcoming and you will find that the cultures are very different. Unless you like spending time alone, you may get lonely as the Dutch don't tend to socialise outside work so you'll probably end up spending a lot of your time in the expat community.

If you do get work, you will be bored stiff as the Dutch have a much lower work ethic than the UK/US so you will not be expected to produce much.

Should you come here and find yourself out of work you will not be entitled to any benefits unless you've been working here for 5 years or more. Once your contract is over, go home or have a holiday then go back to the UK.

I am not trying to put you off, if you've got a job or have a specific reason to leave the UK, but things are pretty bad here at the moment. Hopefully, if things start to pick up in the market generally, then things will improve, but we have been in recession for over 3 years now and it is starting to wear people down, hence the negativity.

**ChicoLondon** · 4 January 2005, 17:15

Contracting in the Netherlands

I went for an interview last year with a major Dutch company and what I found out was that as long as you do not contract for more than 180 days (holidays , weekendsand travelling timenot included) you do not have not to declare it to the tax authorities. The tax system is unduly complex and my accountant was not keen on me taking any Dutch contracts. Not too sure about the working culture but I do know that there are a lot of English people there. The geezer who interviewed was English so was the guy who eventually got the role.

**BlasterBates** · 5 January 2005, 12:52

The 180 day rule is standard, but if you´re not resident in the Netherlands, you´ll be deemed to be a UK resident and you still pay tax in the UK.

Some people do that, i.e. not paying tax at all but as far as I´m aware that is tax evasion.

**expat** · 5 January 2005, 16:26

as long as you do not contract for more than 180 days ..... you do not have not to declare it to the tax authorities.

There are more conditions than that. For example, you have to be paid by a company outside NL, that does not have an establishment in NL. For this purpose they mean your agency, not your Ltd Co.

A day spent in NL during that year counts whether you work it or not. You may need to prove this so keep anything that proves you were outside NL.

You will also need E101 or E111 to prove that you're not liable for SSC.

The question may also arise of the place of supply of the service for VAT purposes. This may be complex.

For example, the Dutch may decide that your customer is the Dutch client: in this case (if you are operating as a UK business even though performing the work in NL) you are providing a cross-border service located in the customer's country: the customer accounts for VAT, you provide an intracommunity invoice without VAT. This unfortunately rather implies that you're working for a Dutch company so your ability to escape Dutch income tax is in question!

Alternatively, they may accept that your customer is the UK agency, and the Dutch client is the agency's customer. In this case you would invoice the agency with VAT as normal, and they would invoice the client without VAT. The agency would therefore have to pay VAT on your invoice without getting any in from the client! Try explaining the justice of that to the agency.

There are only 2 ways out of that impasse: one is for somebody to break the rules (make sure it's not you). The other is to have your place of registration, the client site, and the agency site in THREE different countries rather than just two. Surprisingly, that makes it easier.

Contracting in the Netherlands