Reply to: Summing up Taxation in Holland/EU

[themistry]

I believe my Dutch Accountants (management company) told them when I left their shores (sniff) and the playful bargirls in Hooters.(sigh)

That seems simple enough. You sound like you want to go back!

A final thing. If im a dutch resident paying tax and my LTD cuts a dividend, does that dividend go towards my dutch tax bill?

TM

[Jubber]

So how did the dutch know you were no longer going to be paying them tax?

I believe my Dutch Accountants (management company) told them when I left their shores (sniff) and the playful bargirls in Hooters.(sigh)

[themistry]

Erm ..... pass

When I returned I started a new limited, instructed an accountant and went from there. I don't recall any impertinent questions from Hector. Just filled in the forms and went to work in bleedin' birmingham (after Amsterdam that was a different experience) As far as I remember, everything was cool.

LOL i didn't mean a number! I meant as an additional percentage sorry haha

But anyway, thats useful to know.

So how did the dutch know you were no longer going to be paying them tax?

TM

[Jubber]

Hi jubber,

thanks for this reponse. I think given the oppertunity, i would definately go.

One final questions. Of the 70% you took home, how much extra (if any) were you taxed in the UK?

TM

Erm ..... pass

When I returned I started a new limited, instructed an accountant and went from there. I don't recall any impertinent questions from Hector. Just filled in the forms and went to work in bleedin' birmingham (after Amsterdam that was a different experience) As far as I remember, everything was cool.

[themistry]

Hi everyone,

in response to the answers given, i just have a few new areas of confusion that I would appreciate help with.

1) How do you become a resident of a country (Holland) for tax purposes? Is this taken care of by the services company? Secondly, do I need to do something to tell the government here I am paying dutch tax for x amount of time?

2) Following on from above. Is x the days you are in holland, or calcualted per yer/month etc? I.e. how long am I a dutch resident for tax purposes? Just while I have the gig, or longer?

3) Theoretically would it be possible to bill via my LTD company for the first 183 days, then IF im in Holland longer, start using agency services for billing? If this is the case, will the dutch want the dutch tax from day 1 or from day 184?

Thanking you all
TM

[themistry]

If it helps, my experience:

I was in Holland for a year - as a resident. I saw about 70% of my money. This was with the 30% (it was 35% then I think) ruling. My Dutch management company applied for the 30% rule, it came through in two months. The first two months I was stopped over 50% of my money !!! but got it all back in month 3. I could also get relief on housing costs (not sure if this is still allowed) as I had a home to pay for in the UK.

Hi jubber,

thanks for this reponse. I think given the oppertunity, i would definately go.

One final questions. Of the 70% you took home, how much extra (if any) were you taxed in the UK?

TM

[Turion]

If it helps, my experience:
I could also get relief on housing costs (not sure if this is still allowed) as I had a home to pay for in the UK.

J

That was the old 35% rule. Could claim stuff including hotels/housing and travel etc.

30% rule sucks even more No expenses, no nothing.

[Jubber]

If it helps, my experience:

I was in Holland for a year - as a resident. I saw about 70% of my money. This was with the 30% (it was 35% then I think) ruling. My Dutch management company applied for the 30% rule, it came through in two months. The first two months I was stopped over 50% of my money !!! but got it all back in month 3. I could also get relief on housing costs (not sure if this is still allowed) as I had a home to pay for in the UK.

I had no option to use a UK Ltd as the Dutch client (huge Telcomm) stipulated that all consultants had to pay Dutch taxes through a Dutch company due to 'chain law'. Basically that means the Dutch taxman can come after any unpaid tax 'up the chain' and claim it from the top if necessary (that's the way I understand it). Now this may have been 'agency speak' but all the guys (Brits) I worked with on the same project did the same as me, through various Dutch management companies.

The main thing though is that I was on a very good rate, lived and worked in Amsterdam for a year and had a great time in a great country - PLUS I came home with a bank full of money. Go for it, I would go again with exactly the same set up.

J

[tim123]

No, doesn't work like that. The tax in Holland will be taken into consideration -double tax treaty. You don't get taxed twice.

which is WHAT I said!

tim

[ASB]

This makes sense. But it also means the 30% tax break the dutch give will most likely be eaten up by the UK tax system.

Always looking to minimise my tax burden , if I were to open a Euro account on the continent, into which my salary was paid, could I theoretically declare that I had no income in the UK while I was abroad?

TM

Whether you have income in the UK whilst abroad makes absolutely no difference to whether or not you are tax resident in the UK.

you might want to investigate compensation payments to yourself from your UK ltd if you are going to become non resident in the UK.

[themistry]

The annoying feature happens if the 1st taxing country gives you a tax break that the 2nd taxing country doesn't recognise: then the effect is that what the 1st taxman gives you back, the 2nd taxman takes in his turn; so a tax break can be worthless.

This makes sense. But it also means the 30% tax break the dutch give will most likely be eaten up by the UK tax system.

Always looking to minimise my tax burden , if I were to open a Euro account on the continent, into which my salary was paid, could I theoretically declare that I had no income in the UK while I was abroad?

TM

[expat]

"If you are liable to UK tax as well as Dutch tax, you work out the amount that would be due on the total income in the UK, deduct the tax paid in NL and send the rest to HMG."

So I am in effect being taxed twice.

Not quite as bad as that. You are in effect being taxed at the rate that is the higher of the 2 countries'.

After you have paid Dutch tax, the UK taxman works out what you owe in tax; but he credits you with actual tax payments made to the Dutch. So to put it crudely, if you owe (and pay) 25% to NL, and HMRC work out that you would owe 29% total on their tax system, the UK will take 4% from you (29% total due, minus 25% already paid). If the figures were reversed, the UK would take nothing further from you because you've already covered it.

The annoying feature happens if the 1st taxing country gives you a tax break that the 2nd taxing country doesn't recognise: then the effect is that what the 1st taxman gives you back, the 2nd taxman takes in his turn; so a tax break can be worthless.

[themistry]

No, doesn't work like that. The tax in Holland will be taken into consideration -double tax treaty. You don't get taxed twice.

OH thank the lord!

And i think the final piece of the puzzle falls into place. Thank you very much!

Well nearly the final one, the final one would be.... could any provide any useful info on double taxation?

http://www.hmrc.gov.uk/manuals/dtmanual/dt14000+.htm looks like torture to me

TM

[Turion]

So I am in effect being taxed twice.

And lets say the "leftovers" totalled 75k EURO, I presume i'd be paying 40% on 35k...
Ouch...

TM

No, doesn't work like that. The tax in Holland will be taken into consideration -double tax treaty. You don't get taxed twice.

[themistry]

If you are liable to UK tax as well as Dutch tax, you work out the amount that would be due on the total income in the UK, deduct the tax paid in NL and send the rest to HMG.

Note that you Self Assess this. No-one in the UK "taxes" you on this money, you are supposed to volunteer it.

tim

So I am in effect being taxed twice.

And lets say the "leftovers" totalled 75k EURO, I presume i'd be paying 40% on 35k...
Ouch...

TM