UK and Netherlands TAX for Ltd company/PAYE etc

[bnnnrd]

Hi there
I have just been offered a services contract in the netherlands, for around 6 months.
I currently offer services/consulting via a Ltd company in the UK. Paying VAT and corporation tax in the UK.

I pay personal tax on both my salary and dividends in the UK as a director.

I am now in process of trying to understand how this would actually work if I were working in the Netherlands.

It seems that I have one real option, to go via a Contract Management Company (link in the chain), who will invoice the client and I will invoice them. They then require me to apply for a “Burger Services Number” or sofi number and a self employed VAR certificate.

In addition to this the Contract Management Company require I apply for an A1 certificate (previously called an E101) and also provide
Compliance certificate drawn up by your accountant every quarter, for them to release the funds.


I guess my general questions are:
1: would I as the individual be entitled to any kind of VAT rebates, within the Netherlands?
2: would I be required to pay personal tax on all the invoiced amounts (based on the 30% allowance, and general personal tax rates in the Netherlands) or can these be defered via the UK Limited company and issued as dividends and salary via the UK?
3: If the company is registered in the UK, can I work for the UK subsidiary, while being onsite in the Netherlands, but being a resident of the UK.

I would appreciate any help or advise that could assist me in making the best decision.

Many thanks.

[Martin at NixonWilliams]

Hi there
I have just been offered a services contract in the netherlands, for around 6 months.
I currently offer services/consulting via a Ltd company in the UK. Paying VAT and corporation tax in the UK.

I pay personal tax on both my salary and dividends in the UK as a director.

I am now in process of trying to understand how this would actually work if I were working in the Netherlands.

It seems that I have one real option, to go via a Contract Management Company (link in the chain), who will invoice the client and I will invoice them. They then require me to apply for a “Burger Services Number” or sofi number and a self employed VAR certificate.

In addition to this the Contract Management Company require I apply for an A1 certificate (previously called an E101) and also provide
Compliance certificate drawn up by your accountant every quarter, for them to release the funds.


I guess my general questions are:
1: would I as the individual be entitled to any kind of VAT rebates, within the Netherlands?
2: would I be required to pay personal tax on all the invoiced amounts (based on the 30% allowance, and general personal tax rates in the Netherlands) or can these be defered via the UK Limited company and issued as dividends and salary via the UK?
3: If the company is registered in the UK, can I work for the UK subsidiary, while being onsite in the Netherlands, but being a resident of the UK.

I would appreciate any help or advise that could assist me in making the best decision.

Many thanks.

I cannot provide any information on tax matters in the Netherlands, though there are some older threads on here where contractors have shared their experiences of working there. In any case I would advise you to speak with an accountant who specialises in foreign taxes, or even a Dutch accountant directly.

In terms of your UK VAT position, the services provided are where your customer belongs and are therefore outside the scope of UK VAT.

There is a way of obtaining VAT refunds on your UK return, this is known as the cross border refund system. However, it is not possible to obtain refunds for VAT in countries where you provide services. Therefore, the only way you could obtain VAT refunds in the Netherlands is if you register for VAT there.

I hope this helps.

Martin

[EAFS]

Hi there
I have just been offered a services contract in the netherlands, for around 6 months.
I currently offer services/consulting via a Ltd company in the UK. Paying VAT and corporation tax in the UK.

I pay personal tax on both my salary and dividends in the UK as a director.

I am now in process of trying to understand how this would actually work if I were working in the Netherlands.

It seems that I have one real option, to go via a Contract Management Company (link in the chain), who will invoice the client and I will invoice them. They then require me to apply for a “Burger Services Number” or sofi number and a self employed VAR certificate.

In addition to this the Contract Management Company require I apply for an A1 certificate (previously called an E101) and also provide
Compliance certificate drawn up by your accountant every quarter, for them to release the funds.


I guess my general questions are:
1: would I as the individual be entitled to any kind of VAT rebates, within the Netherlands?
2: would I be required to pay personal tax on all the invoiced amounts (based on the 30% allowance, and general personal tax rates in the Netherlands) or can these be defered via the UK Limited company and issued as dividends and salary via the UK?
3: If the company is registered in the UK, can I work for the UK subsidiary, while being onsite in the Netherlands, but being a resident of the UK.

I would appreciate any help or advise that could assist me in making the best decision.

Many thanks.

Q1: You would not charge VAT in the Netherlands if you are invoicing a dutch agency or client, if you are invoicing a UK agency then you must charge VAT when using your UK limited company.
Q2: You will need to register your limited company in the Netherlands for PAYE, you will need to pay tax on a monthly basis on the salary part. Dividend income will remain taxable in the UK. Unlike the UK you will not be able to declare the minimum salary but an industry average depending on your sector.
Q3: Yes you can work via your UK limited company however you must obtain the VAR certificate, it may be difficult to get the A1/ E101 as you are seconding yourself. You cannot work on-site in the NEtherlands without a sofi/ BSN number.

Management companies are the standard operating system form most contractors coming from the UK. With a management company you will retain circa 65% of your gross invoice before expenses, you can PM me for more details if required. Depending on your rate it may be more beneficial to pay SS in the Netherlands where this is capped unlike the UK.
Clients can request auditor statements before releasing payments, so you must engage with a dutch accountant if you are not going to use a management company.

[expat]

I cannot provide any information on tax matters in the Netherlands, though there are some older threads on here where contractors have shared their experiences of working there. In any case I would advise you to speak with an accountant who specialises in foreign taxes, or even a Dutch accountant directly.

In terms of your UK VAT position, the services provided are where your customer belongs and are therefore outside the scope of UK VAT.

There is a way of obtaining VAT refunds on your UK return, this is known as the cross border refund system. However, it is not possible to obtain refunds for VAT in countries where you provide services. Therefore, the only way you could obtain VAT refunds in the Netherlands is if you register for VAT there.

I hope this helps.

Martin

Minor addition from experience: or you can nominate an agent there who is registered with the local VAT authorities, and who can process your refund for you. They are unlikely to do this for free, though in one case I did manage to get my agency to use a separate branch of the same company to act as the agency.

[Eirikur]

There were some recent threads, do a search on Netherlands.
One of them: http://forums.contractoruk.com/busin...-recently.html

As a former Dutch citizen all I can say is prepare yourself for very high tax rates and mandatory health insurance. Setting up a Ltd co (called bv) in NL is not as straightforward in the Uk.

[Hilfort Contracting Prof]

Working as a contractor in the Netherlands

Hi there,

You have several options to work as a contractor in the Netherlands.

1) Via your own UK ltd.;
2) Via a local payroll solution; or
3) Via a Dutch registered entity;

Depending on your circumstances and especially the contract duration you will need to make a decision what is best for you. If you are not going to overstay 183 day rule during calendar/tax year in the Netherlands then you can remain tax liable in the UK without having to pay any taxes in the Netherlands.

However, if you know that you are going to overstay the 183 days then a dutch payroll solution might be better, as you can obtain the 30% rule (fiscal benefit).

Kind regards,

Martijn
Hilfort Contracting Professionals

[PAgarwal]

UK and Netherlands TAX for new free lancing start up

Dear All,

For continuity I am using this old thread to seek your advice. I was full time employee till Jan'17 where my employer was deducting PAYE Tax and NI in UK. From late Feb'17 I am going to work as a contractor in Netherlands for next 6 months initially and this contract may extend over six months. During the contract I will be working onsite in Netherland and will come back to UK over the weekends. Could the members of this group advice what tax liabilities I will have for rest of the current UK Tax year (i.e. till 5th April 17) and if I am liable to pay tax/file return in UK on my foreign income then to do that what is the most economical way considering I have been in high tax bands being an employee.

Also considering my situation if someone can advise on the short term and mid term operating approach that will work for both Dutch and UK jurisdiction which most UK contractors use to increase their Net Profit.

Also, if someone knows good Dutch accountants in UK who manages their client UK and Dutch Tax liabilities in a seamless way.

Many thanks,
P Agarwal

[stek]

Dear All,

For continuity I am using this old thread to seek your advice. I was full time employee till Jan'17 where my employer was deducting PAYE Tax and NI in UK. From late Feb'17 I am going to work as a contractor in Netherlands for next 6 months initially and this contract may extend over six months. During the contract I will be working onsite in Netherland and will come back to UK over the weekends. Could the members of this group advice what tax liabilities I will have for rest of the current UK Tax year (i.e. till 5th April 17) and if I am liable to pay tax/file return in UK on my foreign income then to do that what is the most economical way considering I have been in high tax bands being an employee.

Also considering my situation if someone can advise on the short term and mid term operating approach that will work for both Dutch and UK jurisdiction which most UK contractors use to increase their Net Profit.

Also, if someone knows good Dutch accountants in UK who manages their client UK and Dutch Tax liabilities in a seamless way.

Many thanks,
P Agarwal

You will Dutch Tax and also UK tax if higher under DTA rules as you will be tax resident in both countries based on your post.

Finding such an accountant isn't going to to be easy, or cheap, and IMHO you'll also need to find a similar Tax advisor, do disrespect to Accountants but they are mostly not tax experts and certainly not expert in international tax...

In my experience the only ways forward with these arrangements and stay 100% legal is pay the tax advisor piper or just relocate 100% to the place of work.

[PAgarwal]

Thanks for your reply. I have recently com across the Accountancy and Tax advisors who works for both UK and Dutch PetersonSims | UK Chartered Accountants for Sole Traders | UK & International Tax.

I am going to discuss them in detail however the initial advice is to setup a UK Ltd company and go on the Dutch payroll solution being an employee of the UK Ltd company and the currency (Euro/Sterling) doesn't impact the operating model.

Although, I am interacting with Petersonsims...will look forward for your advice.

Thanks

[nucastle]

If you're on a Dutch payroll (as you should be) then you have no need for a ltd company unless you already have one.