Summing up Taxation in Holland/EU

[themistry]

Hi all,

there is lots of information on this site and forums in regards to contracting abroad in the EU. Some of this is a little vague, so i'm just putting this post up for clarifications.

Answers to the following would be really appreciated. They revolve around working in the Netherlands.

1) I understand that I can work for 183 days without paying Dutch tax. That is approx 46 weeks of 4 days a week. Why is this 4 days a week and not 5?

2) I may want to rent a flat for 3 months and not travel back to the UK every weekend. A previous post stated that this shouldn't be a problem assuming rule # 1 is not broken.

3) Assuming I bill through my LTD as normal, I presume I bill without VAT. I then pay a salary, NI, PAYE and dividends as normal. Is this correct? If so, does any Dutch tax need to be paid? How does one go about paying Dutch tax if so?

4) The complicated one: Assuming I have to go through a services company, I understand my LTD is out of the equation and I am simply an employee of the services company. They pay me each month after all Dutch taxes have been paid. In this instance, do I need to "top up" my UK NI or pay additional UK tax?

5) For either scenario 3 or 4. Can I claim back travel and accommodation expenses? Some say I can, others have said no.

Thanks for any help everyone,

[NotAllThere]

1) Different countries have different rules for determining whether a day counts towards residency or not. In the UK, it used to be that day of arrival and departure didn't count - so you could do five days work and it would only count as 3 as far as residency was concerned. Now, I believe, it is calculated by the number of "midnights" spent in the country. So five days work = 4 days residency. Presumably the Dutch use the same convention. France count days of arrival and departure, so 5 days work = 5 days residency.

[themistry]

Thanks NotAllThere, thats a clear answer to that one.

So if I do intend to stay over some weekends, if I stay a whole 2 weeks, do I need to add weekends onto this amount too? I.e. If I stayed 2 weeks or 13 midnights, it's 13 days into my "allowance"?

TM

[Turion]

Summing up Taxation in Holland =

That sums it up nicely. This question is what you should be asking the agency/client that offers you a role in NL. It will be them that decides Ltd co or No. Some will say Yes, most No, regardless of promises of staying within the 183 day rule or any other residency criteria.

[themistry]

Summing up Taxation in Holland =

That sums it up nicely. This question is what you should be asking the agency/client that offers you a role in NL. It will be them that decides Ltd co or No. Some will say Yes, most No, regardless of promises of staying within the 183 day rule or any other residency criteria.

Which may be fine, I'm just trying to figure out should that happen, what do I need to do to make it work.

For example, I understand there is a 30% tax free threshold, certain things can be claimed back etc, it would be nice to have a few answers to those things.

TM

[Turion]

Which may be fine, I'm just trying to figure out should that happen, what do I need to do to make it work.

For example, I understand there is a 30% tax free threshold, certain things can be claimed back etc, it would be nice to have a few answers to those things.

TM

30% rule => Nothing can be claimed back

[tim123]

Hi all,

there is lots of information on this site and forums in regards to contracting abroad in the EU. Some of this is a little vague, so i'm just putting this post up for clarifications.

Answers to the following would be really appreciated. They revolve around working in the Netherlands.

1) I understand that I can work for 183 days without paying Dutch tax. That is approx 46 weeks of 4 days a week. Why is this 4 days a week and not 5?

No, it's days present in the country. Days worked is irrelevent.

2) I may want to rent a flat for 3 months and not travel back to the UK every weekend. A previous post stated that this shouldn't be a problem assuming rule # 1 is not broken.

assuming you mean that you won't go home at weekends then the weekend days will be part of the "day count".

3) Assuming I bill through my LTD as normal, I presume I bill without VAT. I then pay a salary, NI, PAYE and dividends as normal. Is this correct? If so, does any Dutch tax need to be paid? How does one go about paying Dutch tax if so?

4) The complicated one: Assuming I have to go through a services company, I understand my LTD is out of the equation and I am simply an employee of the services company. They pay me each month after all Dutch taxes have been paid. In this instance, do I need to "top up" my UK NI or pay additional UK tax?

If paying Dutch tax whilst still UK resident you will have to calculate your UK tax separately. This calculation may result in you needing to pay additional Tax. You will not need to pay UK NI in this case

5) For either scenario 3 or 4. Can I claim back travel and accommodation expenses? Some say I can, others have said no.

Thanks for any help everyone,

From you UK tax, yes. From you Dutch tak I believe not.

tim

[NotAllThere]

Thanks NotAllThere, thats a clear answer to that one.

So if I do intend to stay over some weekends, if I stay a whole 2 weeks, do I need to add weekends onto this amount too? I.e. If I stayed 2 weeks or 13 midnights, it's 13 days into my "allowance"?

TM

Sorry. I wasn't clear. It's days stayed - not days worked. So if you stay 2 weeks, and work 1 day, it's still 13 days.

[LA1]

Netherlands have a diferent rule to the UK and resiency status is not a factor. You will be liable to Dutch tax from day one. Double tax treaty rules should still apply. If going thru a service company they must be registered under Dutch rules.

[expat]

If you are employed by a Dutch company under the "30% rule", as most foreign contractors are, then you will get 30% of your salary paid tax-free, in recognition of the assorted expenses that you may have as a foreigner. You then can't claim much else in the way of travel and accommodation against Dutch tax.

OTOH HMRC are liable to take the view that your place of employment is in Holland (well, it is, after all!), and travel between home and place of employment is not deductible, though they will allow you one return trip, out to take up the employment and home at the end of it.

Note the precise meaning of the 30% rule: it means that the Dutch taxman agrees not to tax you on 30% of your income. He is not in a position to make the same agreement on behalf of the British taxman!

Note: the 30% rule is an option, you could try expenses instead, but most don't find it worthwhile. Also the 30% status has to be applied for by the employer, before the employment starts. It will take a couple of weeks, or months, for it to be approved, and until then you will not be given the 30% tax break.