Contracting for a company in Netherlands from UK

[mabbath]

Hello Experts,

I am a non-EU / non-UK citizen living in UK.

I have a contracting opportunity to work for a company having an entity in Netherlands (also Germany), but not in UK. As a consultant, I would have to work for this company's clients, who may be based in other EU countries, depending on the project. I will still be continuing to live in UK - travelling back home every weekend.

Since this is my 1st time as a contractor, I have a few initial questions, which may not be very specific. Apologies for that.

1. Is it better to open a Limited company in UK OR can I just be a Self-Employed contractor OR any other route (eg: opening company in Netherlands) ?
2. If I am a self-employed contractor in UK, what are the tax implications in UK? Would I need to pay taxes in Netherlands as well?
3. Whom could I reach out to for detailed advice - Accountant / Tax Advisor / somebody else?

Thanks in advance!

[BlasterBates]

Since you will be mainly working in the Netherlands you should tax yourself there. Even though you may be working in other countries as well there will probably be no tax implications there.

The general rule is you can work in a foreign country for a company of another country without tax implications provided they are your "Economic Employer". In very simple terms if the company charges you out on an hourly basis and is in effect acting as an agent then you pay tax where ever you work, i.e. the Economic Employer is actually the foreign client where you are working, if your name isn't on the invoice i.e. your services are simply part of a project that is financed in the Netherlands for example, then you don't as the company in the Netherlands is your Economic Employer, provided you don't end up tax resident.

I would take advice and it would be worth contacting Sue at IPAYE:

https://www.contractoruk.com/forums/...ief-guide.html

[GhostofTarbera]

Your options are

Contract via a Dutch patrolling company

You pay Dutch tax from day 1




Sent from my iPhone using Contractor UK Forum

[zonkkk]

Hello Experts,
I am a non-EU / non-UK citizen living in UK.

Would you not need some sort of work visa to work in the Netherlands?

[mabbath]

Since you will be mainly working in the Netherlands you should tax yourself there. Even though you may be working in other countries as well there will probably be no tax implications there.

The general rule is you can work in a foreign country for a company of another country without tax implications provided they are your "Economic Employer". In very simple terms if the company charges you out on an hourly basis and is in effect acting as an agent then you pay tax where ever you work, i.e. the Economic Employer is actually the foreign client where you are working, if your name isn't on the invoice i.e. your services are simply part of a project that is financed in the Netherlands for example, then you don't as the company in the Netherlands is your Economic Employer, provided you don't end up tax resident.

I would take advice and it would be worth contacting Sue at IPAYE:

https://www.contractoruk.com/forums/...ief-guide.html

Thanks for your quick feedback. I contacted SJD Accountancy today and the person mentioned I could work out this situation by opening a UK Ltd company and paying taxes only in UK provided I work outside UK for less than 180 days. Else, I will get dual taxed - in UK and Netherlands.

If I ensure that I work for < 180 days outside UK, would opening a UK Ltd company be a reasonable option?

The reason why I'm leaning towards opening a Ltd company in UK - I am currently on a visa in UK and will have to switch visa type to take up this contracting job, which would mean I postpone my ILR eligibility by 2 years from now. During these 2 years, if I don't pay taxes at all in UK, but still I reside in UK and I'm earning, I wonder if this will go against my ILR application (not sure).

[mabbath]

Would you not need some sort of work visa to work in the Netherlands?

Yes, I would need a visa for working in the country where the project would be - be it Netherlands/somewhere else. I would be speaking about this with the company to support me in visa processes. Any concerns you see here?

[mabbath]

Since you will be mainly working in the Netherlands you should tax yourself there. Even though you may be working in other countries as well there will probably be no tax implications there.

The general rule is you can work in a foreign country for a company of another country without tax implications provided they are your "Economic Employer". In very simple terms if the company charges you out on an hourly basis and is in effect acting as an agent then you pay tax where ever you work, i.e. the Economic Employer is actually the foreign client where you are working, if your name isn't on the invoice i.e. your services are simply part of a project that is financed in the Netherlands for example, then you don't as the company in the Netherlands is your Economic Employer, provided you don't end up tax resident.

I would take advice and it would be worth contacting Sue at IPAYE:

https://www.contractoruk.com/forums/...ief-guide.html

Thanks for your response. I replied earlier today and seems like the post is not yet published (not sure why?).
I spoke to one of the agencies dealing with International tax and contracting today. The person mentioned that by opening a Ltd company in UK, I could proceed in taking up the contract and pay taxes in UK, provided I don't exceed working for more than 180 days outside the UK. If I do land up working more than 180 days in a country outside UK, that may trigger dual taxation. Is this correct?

Where I'm coming from? - For taking up this contracting opportunity, I will have to change my visa type which will postpone my ILR application by 2 years from now. For the ILR application, if I'm not working in UK/paying taxes in UK, I may have lesser chances for the application to be successful. Hence, my preference would be to be based in the UK taxation somehow.

[mabbath]

Would you not need some sort of work visa to work in the Netherlands?

Yes, it does. In fact, It would need a visa for the country where I will be carrying out the project. I will be speaking with the company to organize for these visa processes.

[eek]

Yes, it does. In fact, It would need a visa for the country where I will be carrying out the project. I will be speaking with the company to organize for these visa processes.

I hope the client is already aware of your need for a visa as the Dutch are remarkably racist (as various members on here can confirm) and chances are they will be moving on to the next candidate.

[BlasterBates]

Thanks for your response. I replied earlier today and seems like the post is not yet published (not sure why?).
I spoke to one of the agencies dealing with International tax and contracting today. The person mentioned that by opening a Ltd company in UK, I could proceed in taking up the contract and pay taxes in UK, provided I don't exceed working for more than 180 days outside the UK. If I do land up working more than 180 days in a country outside UK, that may trigger dual taxation. Is this correct?

Where I'm coming from? - For taking up this contracting opportunity, I will have to change my visa type which will postpone my ILR application by 2 years from now. For the ILR application, if I'm not working in UK/paying taxes in UK, I may have lesser chances for the application to be successful. Hence, my preference would be to be based in the UK taxation somehow.

You need to speak to a tax expert and not an agent. They are not generally qualified.

You will probably not be able to work through your UK Ltd and tax your earnings in the UK even for less than 6 months. I would strongly advise talking to Sue at IPAYE.

https://www.contractoruk.com/forums/...ief-guide.html

I believe that I am exempt from local Taxation as my assignment will be less than 183 days in the country.

In most cases an individual on assignment will be liable to taxation on income arising in the country in which they are working from day 1. Some countries may ignore stays of a month or less. Generally, after 183 days the individual becomes tax resident in the country in which they work, as well as the country in which they live. This then means that the order in which income is taxed, and, in some cases the rate of tax withheld, is dictated by the relevant Double Taxation Treaty.