Reply to: Any foreign tax expert here to help

[Hilfort Contracting Prof]

Working via your ltd in the Netherlands

Hi,

As a contractor you can work via your own ltd in the Netherlands without necessarily becoming tax liable in NL. You need to be aware of the following compliance requirements:

- VAR;
- A1;
- 183 day log;
- WAADI registration.

If you require more information please send me a PM. I am more than happy to assist further. Have a pleasant day.

Kr,

Martijn
Hilfort Contracting Professionals

Hi,

I need some advice on whether my limited company and/or I will be liable for Dutch taxes if I work there on a 6 months contract.
I will be having my family in UK for the whole duration.
I am currently a UK tax resident and maintain my home here.
Will be in Netherlands from Monday - Friday (sometimes may be up to Thursday, not sure yet).
Will be invoicing through UK limited and paying myself through it.

Regards,

[ASB]

tiger,

There is no interest or motivation for anybody in clarity. Not least because any individuals circumstances are different.

Though I still do a certain amount of cross border work it is for a multinational. They sort out the mess. When still contracting if was as a bum on seat for some years and more latterly on much more of a fixed price basis. So, these circumstances are different to yours.

You can find the general principles on Europa.eu. But they don't even fit in very well with themselves. Let along the domestic law of wherever you happen to reside and work.

Whichever way you decide, best of luck. There are loads of threads around detailing what has happened when things have gone wrong with international working.

Look at it this way: loads of Indians etc arrive on 6 months stints here. Should they be paying UK taxes or not (if yest why shouldn't you be doing the same thing).

[stek]

As per the contracts I have received, I will be free from control, with client in agreement be able to substitute and in every sense as self-employed person with a UK limited company. I know this is all IR35 compliance but in no sense client would be employer. I have specifically asked for 'expense claim' clause to be removed. I will be coming back mostly on Fridays but could be Thursdays as well.

It seems there is no clear cut rule even with a DTP treaty in place and things left as ambiguous as they could be. There is no clear cut rule for someone to figure out things which is how things should be. Politicians and bureaucrats not doing their jobs properly. Tax experts willing to advice and charge you the money but not guaranteeing their advice.

I am left with to make a choice based on whether I want to be on the safe side or take a chance as I have received both kinds of answers here. I have spoken to NL accountants and UK accountants - they suggest it should be ok for short times (180 days or less) but no one seems to have done it - which is worrying and also most people advising me otherwise.

As clear as mud as ever.

Thanks people for taking time to putting your thoughts across.

Unless the rate is stellar don't bother is my advice. Get this wrong and you could be still sorting out the mess for years. My mate was working is CH 2007/8 and it's still getting badgered by the Swiss Tax authorities, nothing serious but it never goes away it seems.

[tigerinopen]

Paragraph 2 article 14 of the dta might apply. This would render the income liable to taxation in the uk only.

But it is far from certain. The first hurdle is who is the employer for the purposes of the treaty. The nl authorities are likely to consider it as the end client.

If the nl authorities concede that the uk company is the employer for the purposes of the treaty they may consider that the uk company has gained nl residence.

As per the contracts I have received, I will be free from control, with client in agreement be able to substitute and in every sense as self-employed person with a UK limited company. I know this is all IR35 compliance but in no sense client would be employer. I have specifically asked for 'expense claim' clause to be removed. I will be coming back mostly on Fridays but could be Thursdays as well.

It seems there is no clear cut rule even with a DTP treaty in place and things left as ambiguous as they could be. There is no clear cut rule for someone to figure out things which is how things should be. Politicians and bureaucrats not doing their jobs properly. Tax experts willing to advice and charge you the money but not guaranteeing their advice.

I am left with to make a choice based on whether I want to be on the safe side or take a chance as I have received both kinds of answers here. I have spoken to NL accountants and UK accountants - they suggest it should be ok for short times (180 days or less) but no one seems to have done it - which is worrying and also most people advising me otherwise.

As clear as mud as ever.

Thanks people for taking time to putting your thoughts across.

[ASB]

Paragraph 2 article 14 of the dta might apply. This would render the income liable to taxation in the uk only.

But it is far from certain. The first hurdle is who is the employer for the purposes of the treaty. The nl authorities are likely to consider it as the end client.

If the nl authorities concede that the uk company is the employer for the purposes of the treaty they may consider that the uk company has gained nl residence.

[petergriffin]

He won't be working in the NL. His UK company will send him on a business trip to NL for a bit.
.

While this might be acceptable for the HMRC, it won't work with the Belastingdienst.

So I called them up this morning and they said they can help me get a SOFI and VAR and they said that I should not have to pay any NL tax as long as I leave the country before 183 days.

They are talking bollox. You will be taxed, but then you would be liable for a refund (the year after, before March).

When working in the Netherlands you are taxable from day 1 on Dutch sourced income.
You can work through your limited company but you will need to register your company with the dutch tax office and receive a VAR certificate, you will then need to engage with a Dutch accountant to process your monthly payroll, you must pay monthly payroll taxes in the Netherlands.

This ^^^.

[tigerinopen]

When working in the Netherlands you are taxable from day 1 on Dutch sourced income.
You can work through your limited company but you will need to register your company with the dutch tax office and receive a VAR certificate, you will then need to engage with a Dutch accountant to process your monthly payroll, you must pay monthly payroll taxes in the Netherlands. As the contract is only 6 months and I presume you have not worked in the Netherlands previously you would be looking at a positive retention figure, I can produce projections for your contract if this would help you,,, please feel free to contact me. The client will almost certainly want you to utilise a Dutch umbrella, this is due to chain law legislation, Another issue that could come up as it auditor statements. The agency or client may request an auditor statement to prove payment of taxes before releasing your final payment. I have seen this before however it has never been an issue as we always provide the auditor statements or the use of a G account. Some contractors using other companies have not been so fortunate.

just PMed you.

[EAFS]

Hi,

I need some advice on whether my limited company and/or I will be liable for Dutch taxes if I work there on a 6 months contract.
I will be having my family in UK for the whole duration.
I am currently a UK tax resident and maintain my home here.
Will be in Netherlands from Monday - Friday (sometimes may be up to Thursday, not sure yet).
Will be invoicing through UK limited and paying myself through it.

Regards,

When working in the Netherlands you are taxable from day 1 on Dutch sourced income.
You can work through your limited company but you will need to register your company with the dutch tax office and receive a VAR certificate, you will then need to engage with a Dutch accountant to process your monthly payroll, you must pay monthly payroll taxes in the Netherlands. As the contract is only 6 months and I presume you have not worked in the Netherlands previously you would be looking at a positive retention figure, I can produce projections for your contract if this would help you,,, please feel free to contact me. The client will almost certainly want you to utilise a Dutch umbrella, this is due to chain law legislation, Another issue that could come up as it auditor statements. The agency or client may request an auditor statement to prove payment of taxes before releasing your final payment. I have seen this before however it has never been an issue as we always provide the auditor statements or the use of a G account. Some contractors using other companies have not been so fortunate.

[tigerinopen]

Staying below the radar and dealing with a tax authority when they find out about you is a very expensive route. A bit like shopping and only paying when the store detective stops you after you left the shop.

In the end paying tax as a non-resident, which is what you would do is the best and safest route given that the tax rates won't be that high and you won't be paying social insurance.

I would go and see an NL accountant and consult about registering your UK ltd with them and sort out tax or claim exemption.

You won't be taxed twice and in the end I think you'll find little difference in the amount of tax you pay, given that you are non-resident in NL and only there for 6 months.

Tax authorities have a very clear rule that non-residents pay tax on income sourced in their country. It's up to you to argue why you're exempt. Better to deal with the bureacrats than the "Special Investigation Heavy Mob" which is what you get if you're "below the radar".

Spoke to PSG and they advised to speak to ITS International for contracting overseas. ITS themselves could not help as they mostly deal in other countries in EU but they advised me to speak to Yellow Stone accountants in Netherlands. So I called them up this morning and they said they can help me get a SOFI and VAR and they said that I should not have to pay any NL tax as long as I leave the country before 183 days.

[stek]

so if I am out of Netherlands before 183 days, I should 'generally' be ok.
Agency is more than happy for me to go via UK limited company. Have today send the contract.

So if cant be taxed twice in EU for same earnings, I feel I should go for it. The reason I want to go via limited company option is so I can avail a mortgage here and for that advice I have received is that I should go via UK limited company so lenders can see the money coming in UK business. I will pay the tax to Dutch if they go mad after me. I most likely will end up 2 accountants in that case.

Look, I am 99% certain that the agent will insist u go Dutch Brolly and if you refuse, will drop you cos there are loads of others. So do that.

Or is this a slim chance of maybe a contract that some agent as tentatively contracted you about, or a definite offer?

[BlasterBates]

Staying below the radar and dealing with a tax authority when they find out about you is a very expensive route. A bit like shopping and only paying when the store detective stops you after you left the shop.

In the end paying tax as a non-resident, which is what you would do is the best and safest route given that the tax rates won't be that high and you won't be paying social insurance.

I would go and see an NL accountant and consult about registering your UK ltd with them and sort out tax or claim exemption.

You won't be taxed twice and in the end I think you'll find little difference in the amount of tax you pay, given that you are non-resident in NL and only there for 6 months.

Tax authorities have a very clear rule that non-residents pay tax on income sourced in their country. It's up to you to argue why you're exempt. Better to deal with the bureacrats than the "Special Investigation Heavy Mob" which is what you get if you're "below the radar".

[ASB]

He won't be working in the NL. His UK company will send him on a business trip to NL for a bit.
While you make some possibly valid claims, I'd go mad if I had to register as an employee with every country that my UK Ltd has sent me to.
To put it another way and to reverse the term loved by HMRC, I will not be disguising my company as an employee just to go through the joys of cmplying with the local labour laws.

I agree. His view is his company is sending him on a trip. Whether or not the nl authorities share that view remains to be seen.

[ASB]

No.

As I said you can be.

It can be relieved, possibly in its entirity. It is not the case that only one state gets taxing rights. It all depends on the dta. If you couldnt get taxed twice there would be no need for an dtas.

Check out the eu website. It makes it crystal clear that double taxation fan occur and even gives some examples.

[yasockie]

What if the client demands your SoFi number ? (it is illegal to work in NL without one)

He won't be working in the NL. His UK company will send him on a business trip to NL for a bit.
While you make some possibly valid claims, I'd go mad if I had to register as an employee with every country that my UK Ltd has sent me to.
To put it another way and to reverse the term loved by HMRC, I will not be disguising my company as an employee just to go through the joys of cmplying with the local labour laws.

[petergriffin]

You can be taxed twice for the same earnings.

No.