Working in Netherlands (from Spain)

**JustMe** · 15 June 2010, 12:39

Your setup is not possible.

If you want to work in Holland this setup is not possible. You will have to go on a payrole.
The payrole-company will apply for 30% rule. Use google to find payrole services (search payrole, expat, holland

I think Itecs is to expensive.

There is no other legal possibility.

**nodric** · 15 June 2010, 13:39

Originally posted by JustMe View Post

If you want to work in Holland this setup is not possible. You will have to go on a payrole.
The payrole-company will apply for 30% rule. Use google to find payrole services (search payrole, expat, holland

I think Itecs is to expensive.

There is no other legal possibility.

Not strictly true...

Tons of discussion on the forum on this topic, and plenty by me

Anyway, EU rules do not insist that you work on payroll when doing business in Holland, and the Dutch cannot force you!

The payroll/30% option is just the easy way for someone on a long term contract (classed as a resident) that wants to avoid the issues with tax and SS, and does not want to setup a full blown Dutch company.

EU trade rules state that any member state company/business can conduct business with any other member state company/business, and that the free movement of staff and employees must be permitted. If staff become permanent residents (the usual 183 days rule, but its application varies by country e.g. number of travel days allowed etc), then they must pay local taxes and SS. For temporary staff assignments this is not applicable, again there are country specific rules.

This does however govern companies. A Spanish company can trade with a client I the UK, and deliver services in Holland, but a self employed person has few, if any, options.

For all those that start screaming ‘Foul’, remember Cap Gemini and their like do not send all their staff to iTecs when they send them to Holland on assignment.

Unfortunately all this gets complicated to structure, and maybe for a short term contract by a ‘one man band’, it ain’t worth the hassle!

The other important point for the OP, is that no agency can force you to use any particular management company. iTecs have come in for their fair share on criticism over the years, and certainly are expensive. Few agents will drop you if you refuse their preferred management company. What will they tell the ClientCo? They will compromise in all but the most stubborn cases.

OP – stand your ground, do you research, and select the best option. Clearly if you want no hassle, and the contract is likely to be long term, then the 30% option is the only easy way. i.e. You declare everything and pay 30% of the total. I assume some allowances for travel and expenses are allowed, but there plenty of folks on here know better than me

Search the board for further information on working in Holland.

If the benefits of avoiding paying even 30% are greater than the hassles involved, then look into trading as a Spanish company, and sending yourself overseas on an assignment. Just make sure you are not the sole director so you maintain your Centre of Economic Interest in Spain!

**Brussels Slumdog** · 15 June 2010, 15:30

Working in the Netherlands using an agency

Firstly I doubt whether any agency will allow you to bill them for work in the Netherlands through a limited
Company. How Cap Gemini bills their clients is not relevant for you as a short term contractor. You must be on a dutch payroll to work in the Netherlands. You could contact Expatica and find out how to use a local payroll company and avoid using a foreign management company.
I billed AFS and their local payroll company in the Netherlands remitted my tax(PAYE) and SS to the dutch government. I received the net payment.
Secondly using a payroll company in the Netherlands will be more tax efficient for you at €720 a day which is
€14440 per month than using your Spanish company.
€14440 less fees €440 €14,000 less social security equals about €13000 less 30% ruling €3900.
You do not have to keep receipts whereas with your company you do and secondly if you are working 50% elsewhere then you will have to stay in **** star hotels to spend €3900
Thirdly you must take out Basic private insurance within 3 months which will cost you about €100 for the maximum excess. I got fined €120 for not doing this.
Applying directly for your own 30% ruling maybe difficult.

**PhilBreeze** · 15 June 2010, 16:14

In response to the OP's point "my agency contact (which is located in the UK) tells me that I have to work there thru an umbrella company": there are agency regulations in the UK which mean agencies are reluctant to hold the contract with anything other than a corporate body. This is because this is the only sure-fire way around becoming liable to employment rights and PAYE in respect of individuals. So you are unlikely to find an agency who will let you engage them directly as a self-employed individual (registered in Spain, UK, or wherever) because of the risk exposure for the agency. Therefore you will need to engage them via a limited company, whether that is your own company or an umbrella/management company. The legislation can be found at Section 44 of Income Tax (Earnings & Pensions) Act 2003: Income Tax (Earnings and Pensions) Act 2003 (c. 1)

In Netherlands the requirement to be payrolled by a Dutch-registered payroll company is typically client-driven because Chain Law allows the Dutch authorities potentially to hold the client liable for unpaid taxes. Therefore they will insist on the contractor being payrolled locally so that they are sure the contractor is paying the correct amount of tax. The client is the agency's customer so the agency will nearly always honour this requirement to keep the client happy. Usually foreign workers will qualify for the 30% ruling.

**nodric** · 16 June 2010, 15:42

Originally posted by Brussels Slumdog View Post

€14440 less fees €440 €14,000 less social security equals about €13000 less 30% ruling €3900.

you must take out Basic private insurance within 3 months which will cost you about €100 for the maximum excess.

So net deductions are:

€440 - Fees
€1000 - SS
€3900 - Tax
€100 - Insurance

€5440 - Total

THis equates to 37% deductions overall, a net retention of 63%, and no allowable expenses.

Not as good as it seems on the face of it

Still better than Belgium though!

**JustMe** · 16 June 2010, 16:14

30% ruling

30% ruling means that the first 30% of your income is tax-free (net cost allowance)
In our example this means that you pay tax over 13000 - 3900 = 9100 . Tax probably 4500.

So you net income will be 3900+4600 = 8.500 euro (60% net retention).

regards
justme

**PhilBreeze** · 16 June 2010, 16:22

yes the only real variable here should be the fees charged by the local payroll company

**nodric** · 17 June 2010, 08:01

Originally posted by JustMe View Post

30% ruling means that the first 30% of your income is tax-free (net cost allowance)
In our example this means that you pay tax over 13000 - 3900 = 9100 . Tax probably 4500.

So you net income will be 3900+4600 = 8.500 euro (60% net retention).

regards
justme

Maybe it's just me, but loosing 40% does seem to be not such a great deal. i.e. It sucks.

I achieve better than that in Belgium... I know, hard to believe! And no hassle from agencies about using a MyCo, either local or UK.

On the more general question of being payrolled as the only way to work in Holland.

Whilst I hear all the arguments about Dutch companies being overly cautious, with good reason it seems, and therefore the agencies also being twitchy, there is no legal way they can restrict a bona fide MyCo from trading in Holland, whether on contracts or otherwise.

Of course the battles maybe harder to fight with the agent, and the ClientCo, and for professional reasons you may choose not to fight, but I'm sure if you put the effort in, and demonstrate all is well, you'd win through. Involve your accountant etc...

With a 60% retention, maybe less if the rates are higher than the OP, it might be worth looking at making the effort, especially if the contract has the potential to be long term...

**CiderEagle** · 17 June 2010, 21:00

Hi Antonio. I've been working in the Netherlands for the past ten months, and I operated with a Dutch management company as described elsewhere on the thread. I successfully obtained the 30% ruling and ended up with 65% retention. Its less than the 80% or so I get in the UK through my UK Limited Company. It is my understanding that this is the only fully compliant way of operating, although Nodric may have better information than me (and give him his due, he generally talks sens and doesn't make stupid claims!)

Better than Belgium, where I am currently, though. Which is why I'm looking to move on ASAP.

Working in Netherlands (from Spain)