contract in NL

[stek]

How would a limited company (which for most of us is a UK Ltd) be taxed locally in practice? Some kind of registration or return submitted at the end of your financial year. Or something else?

Is there no way at all to simplify the process at all? For what it's worth the agency is from Belgium and my ltd is a UK one. Was planning on going home every 1-2 weeks. Hopefully at 4 days in and weeks away from submitting an invoice I'm hoping it's early days for sorting this out.

You would need a local account and tax advisor and/or a UK based one who is expert in this field.

The most risk free way to do this is via local payroll, its what I do in Denmark, the fees are quite high (€500 a month) but they sort the lot out, assist in local registration, make sure you are registered for tax properly, and are in the local social security and health system. Worth pointing out too that the EHIC that covers you health-wise when abroad in Europe ifs for emergency treatment only, not full health care so if you fell ill and only had that you might face a very large bill.

My ltd is still operating at the moment and soon I'll take a view as to whether I'll make it dormant or close it down.

You can open a local Ltd, it's pretty easy in Denmark, dunno about others, but seems like a lot of effort to me and I'd lose the advantage of the 30% tax scheme I'm on.

Or, you can do what most do, live in hotels (living at a house means the owner will have to register that you are living there), trade via your Ltd as if it was stall UK based, but I think that is a major risk nowadays, since what you are actually doing is working illegally, and evading tax, and wait for them to catch up with you and bankrupt you, witness the 'German Taxman Cometh' thread on here somewhere...

So the basic things to consider are:

1. Tax is due where the work is done.
2. You can be tax resident in two places (or more) and while DTA's exist, you'll need a tax advisor unless you have a lot of time to read tax law.
3. In most EU states you have to start the process to register your presence within 30 days, this is a legal requirement.
4. The EHIC card doesn't give you unlimited free health care across Europe.
5. One-man Ltd companies move with the controlling person.

HTH...

[mmmBeer]

What other EU countries? Anyway, no. With very few exceptions (e.g. US citizenship), tax is based on residency, i.e. where the work is done. Also, as a controlling person, taxation of YourCo will depend on your personal residency in most cases, as indicated above. That said, you will also have obligations in the UK, and are likely to remain resident here for tax purposes, as well as in NL (definitely if you are here 3 days every week). You can't choose where you pay tax, but you can offset double taxation in most cases.

Some countries if you fly in Monday and out Friday you are deemed a commuter and don't need to register locally

[stek]

Some countries if you fly in Monday and out Friday you are deemed a commuter and don't need to register locally

Cross-border worker, you still have to account for days in, days out, travel days to the satisfaction of each EU State's Tax authorities and you will still pay tax to the country where the work is done.

Here in the Nordics the guys flit from DK, SE, FI and NO and all are very diligent in keeping proofs of where they are and for how long.

"Where do I pay tax?

As a cross border worker you must pay income tax in the country where you earn your income, but your ultimate tax responsibility is with the country where you live so you must submit an annual self assessment each year."

NAT knows a lot about this, maybe he'll chip in.

[mmmBeer]

Some countries if you fly in Monday and out Friday you are deemed a commuter and don't need to register locally

Not sure if this is still valid but would make sense for large vendors continually providing consultants for projects....
"If you are an EU/EEA citizen and are working in Sweden but live in another EU/EEA country to which you return regularly, you do not need to register in Sweden."

[stek]

Not sure if this is still valid but would make sense for large vendors continually providing consultants for projects....
"If you are an EU/EEA citizen and are working in Sweden but live in another EU/EEA country to which you return regularly, you do not need to register in Sweden."

Yep, but we're none of us IBM or HPE are we?

[mmmBeer]

Yep, but we're none of us IBM or HPE are we?

No but if you are a consultant for IBM working alongside their perm employees flying in Monday to Friday on site how does that work? As far as the end client is concerned you are IBM they don't have a contract with you ....

[stek]

No but if you are a consultant for IBM working alongside their perm employees flying in Monday to Friday on site how does that work? As far as the end client is concerned you are IBM they don't have a contract with you ....

Doesn't matter what the client thinks, it's what the tax man thinks that counts.

[m0n1k3r]

How would a limited company (which for most of us is a UK Ltd) be taxed locally in practice? Some kind of registration or return submitted at the end of your financial year. Or something else?

Is there no way at all to simplify the process at all? For what it's worth the agency is from Belgium and my ltd is a UK one. Was planning on going home every 1-2 weeks. Hopefully at 4 days in and weeks away from submitting an invoice I'm hoping it's early days for sorting this out.

Any EU-based company can do business in any other EU country. In many cases a non-EU company can do the same, but with more onerous documentation requirements.

What is require is a registration for local taxes, which usually requires a "certificate of compliance" issued by the HMRC to evidence that the company has fulfilled all its tax obligations in its home country, some form filling and a bit of waiting. The hardest part is getting hold of the certificate of compliance as it has to be done by letter and takes a long time for the HMRC to respond. In the Netherlands it is quite straightforward:

Registering as an employer

If the company is deemed to have a permanent establishment then it will also need to register a foreign branch in that country and (usually) maintain separate accounting for the branch. This is all regulated by an EU directive so the rules are pretty much the same in all EU member states (including the UK):

EUR-Lex - 31989L0666 - EN

In the Netherlands, as in a number of other countries (including the UK in certain cases, which is why recruiters don't want to deal with self-employed sole traders), the tax authorities can go after the hirer in the case the supplier doesn't fulfil his/her tax obligations. This can be avoided by setting up a 'G' account, which is a three-party account involving the bank, your company and the Dutch tax authorities. It formally belongs to your company, but only the tax authorities can withdraw. Your company sends the invoice, stating both your normal and your G accounts. The customer pays 70% to your normal bank account and 30% to the G account. The tax authorities then takes whatever they need from the G account and pays the balance to your company at some point in the future.

It however means more administration for the customer, why they would probably still require you to go through a payroll agency. Many Dutch companies outsource their payroll management anyway

G account

The 30% tax ruling requires you to be employed by a Dutch company, such as an umbrella or your own B.V.

[nucastle]

I've had quite the morning.

Spoke to Gary at EAFS this morning and explained my precise situation. As I feared, yes I'm completely unprepared due to being badly briefed by the agent who was under the assumption that there was literally no change in my situation given I'm only here for 3 months.

Not so.

I need to be registered locally ASAP for a Dutch social security ID number regardless of what happens, and I've been advised to get a dutch compliant payroll solution set up with them as soon as possible. So basically going onto a Brolly.

The agent is trying to see what would be involved in continuing to use my UK limited and from the back and forth it sounds like that involves getting on board with another accountant or payroll company in addition to my UK accountant. I'm then guessing the complexities of having a 1 man Ltd company, paying myself a low salary and all the other details would then be another issue I'd need to face.

So, I've told the agent that this is not preferable and that I need the existing contract torn up in any case as I will be working through a brolly or otherwise hassle free structure. This no doubt makes the 2000 quid a month expenses flying back and forth to the UK and paying for accommodation even less attractive, so he's asked me how much more my rate would have to be..... whether or not he's ready for the answer is another issue.

So - Yeah much of the information on here gets me/us into 'i told you so' territory, but the problem with most of the advice out there is a very small percentage of it is actually empirical.

Hopefully this 'real world' situation brings things into focus.

[stek]

I've had quite the morning.

Spoke to Gary at EAFS this morning and explained my precise situation. As I feared, yes I'm completely unprepared due to being badly briefed by the agent who was under the assumption that there was literally no change in my situation given I'm only here for 3 months.

Not so.

I need to be registered locally ASAP for a Dutch social security ID number regardless of what happens, and I've been advised to get a dutch compliant payroll solution set up with them as soon as possible. So basically going onto a Brolly.

The agent is trying to see what would be involved in continuing to use my UK limited and from the back and forth it sounds like that involves getting on board with another accountant or payroll company in addition to my UK accountant. I'm then guessing the complexities of having a 1 man Ltd company, paying myself a low salary and all the other details would then be another issue I'd need to face.

So, I've told the agent that this is not preferable and that I need the existing contract torn up in any case as I will be working through a brolly or otherwise hassle free structure. This no doubt makes the 2000 quid a month expenses flying back and forth to the UK and paying for accommodation even less attractive, so he's asked me how much more my rate would have to be..... whether or not he's ready for the answer is another issue.

So - Yeah much of the information on here gets me/us into 'i told you so' territory, but the problem with most of the advice out there is a very small percentage of it is actually empirical.

Hopefully this 'real world' situation brings things into focus.

Assuming the Dutch 30% payroll scheme for people like us the same or similar to the Danish one I'm on, it might not be so bad.

1. I pay around 30% tax, flat rate, and claim an allowance against for dual homes brings me down to around 26% effective.

2. All that net goes into your personal account, no more accounting, drawings, CT, nothing.

3. My travel/accom costs here in Copenhagen are similar to those I had in Farnborough so no issue there.

The only issues I've faced are having to avoid being in UK for more than 91 days a year, to avoid dual taxation woes (there are more tests, it's not so simple in reality) so that's about 7 days a month, I do one week WFH in UK (tho to be non tax resident in UK you can only work for three, I'm cheating the system a bit there) - three weeks on site.

Another is registering and 'getting into the system' over there, dealing with Gov offices anywhere is a nightmare, and the offices are only ever open 10:00-14:00 and full of Chinese students, took me about two months to 'get legal' fully.

Rate needs to be good, luckily the generally tanking pound is good news!