Reply to: contract in NL

[stek]

The Dutch 30% scheme is very different. You're not allowed to claim anything when you're in that scheme. If you do want to claim expenses such as housing and travel you have to pay the full tax 52%

The Danish gives me a claim of £50 a working day against tax for dual home and that's it, though my payslip does tantalisingly indicate I can claim for 'legitimate' business expenses, gonna ask about that!

[nucastle]

Yeah that's just dawned on me now (well, settled in finally). The 30% rule is intended to cover the expenses you incur, so you can't then claim expenses on top of that.

As if they were going to give you a 30% deduction just for the heck of it!

[Eirikur]

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!

The Dutch 30% scheme is very different. You're not allowed to claim anything when you're in that scheme. If you do want to claim expenses such as housing and travel you have to pay the full tax 52%

[nucastle]

What's the deal with claiming expenses with a brolly for an EU gig?

Can it be done legitimately as I'm out of the country, or am I in the same boat as UK bods are with not being able to claim T&S any more.

Fag packet maths is putting me at 2600 quid a month after a weekly flight, a half decent hotel and daily subsistence costs. Not great if that has to come out of already taxed income.

[jamesbrown]

I'm all for bending the rules a bit, did a stint in Russia but I know the limits!

Yup.

[stek]

Absolutely, agreed. This is really where people get into difficulties. Never take advice on international taxation from a local accountant, let alone a potential client or agent! It's a minefield, even in the relatively straightforward EU.

I had one agent for a contract in Egypt, which I got the offer for, after I researched, saying it's fine to work on a tourist visa and overstay - no issue. Might be true in countries like that off the corruption scale but the same was true in reverse, dodgy on visa, may mean dodgy on actually paying me, so I binned it.

I'm all for bending the rules a bit, did a stint in Russia but I know the limits!

[jamesbrown]

Which is why one needs a tax advisor when in this position.

Absolutely, agreed. This is really where people get into difficulties. Never take advice on international taxation from a local accountant, let alone a potential client or agent! It's a minefield, even in the relatively straightforward EU.

[stek]

Yes, the Danish scheme is great! Time limited, if I recall though (?). I didn't realise that the Dutch had that too (it's been a long time since I worked there though).

In terms of avoiding becoming tax resident in the UK, it's way more difficult than it used to be (since the statutory residence test was introduced). Here's the updated guidance. I guess you're referring to the "Third automatic overseas test" for someone working "full-time" overseas. Yes, 91 days, but you also cannot work in the UK for more than 31 days (counted as 3+ hours per day).

5 years, I'll be 61 then!

I do play fast and loose with the 3hrs a day rule when in UK, but to be honest it's hard to prove one way or another, that's my risk and I fully accept I may well fail the tests come tax year end etc. And I'll be almost 100% in DK or SE until march anyway so it might even out. I record everything, where I am, dates, length of time etc...

But as I pay 30% on my whole earnings in DK, that might be more tax than I would pay in UK since I'd be partly on the 40% rate - but in Denmark I have no personal allowances, under UK tax I would.

Which is why one needs a tax advisor when in this position.

Up till now I'd left things open until I knew what I wanted to do, but now I know I want to stay in the Nordics, so I think after Xmas, I'll do the MVL on my limited or just make it dormant.

One think is for sure, it's not possible to just hop into DE, NL, CH, DK etc, hop back and ignore local law/tax on the basis that's it's EU freedom of movement, so hopefully this thread will help others.

[jamesbrown]

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!

Yes, the Danish scheme is great! Time limited, if I recall though (?). I didn't realise that the Dutch had that too (it's been a long time since I worked there though).

In terms of avoiding becoming tax resident in the UK, it's way more difficult than it used to be (since the statutory residence test was introduced). Here's the updated guidance. I guess you're referring to the "Third automatic overseas test" for someone working "full-time" overseas. Yes, 91 days, but you also cannot work in the UK for more than 31 days (counted as 3+ hours per day).

[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!

[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.

[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.

[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.

[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]

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?