What's with this Dutch 30% rule?

[Jubber]

Can someone clarify exactly what is meant by "claiming expenses"? Does it mean claiming from the client, or claiming tax back on personal expenses.

Is there also anything to consider with VAT? Or since you'd be the one paid, rather than your Ltd, does this stop being an issue?

I believe what expat is saying is that you cannot claim things like flights etc (I really can't remember) - but if you can get the client to pay for them - great ! fill your boots. I rented a house out there and at the time (not sure about now) I got tax relief on the rent I paid. For some reason because I had a house in Blighty, I got tax relief on the rent I paid in Holland.

I didn't have to worry about VAT as the Dutch management company took care of all that. It was like using an umbrella company basically, except it was a firm of accountants. Oh and by the way - they charged 350 smackers a month to do it all which I thought was a bit fierce but I was ripped to the tits most nights so didn't care. (a lot younger too)

[d000hg]

Can someone clarify exactly what is meant by "claiming expenses"? Does it mean claiming from the client, or claiming tax back on personal expenses.

Is there also anything to consider with VAT? Or since you'd be the one paid, rather than your Ltd, does this stop being an issue?

[expat]

I loved it out there and I did keep about 70% of my money. I was there for a year and used a Dutch management company. I had no choice, the client (major Telecom) insisted ALL contractors used Dutch companies or no gig. Simple.

The 30% (I think it was 35% when I was there) 'rule' part took about two months to come through, but I got all the overpaid tax back. Without it you would pay at least 55% stoppages. Don't talk about it too much to the Dutch - they hate it (obviously) Just keep quiet and earn your dosh and have a good time. The Cloggies are great and they love Brits and hate Germans - perfect

I kept about 64%. At a guess this is consistent with my 30% rule compared to your 35% rule, with possibly different rates and therefore different marginal tax rates.

Remember that using this option precludes claiming expenses due to coming from outside NL, so you have to pay travel and accommodation with taxed money, which will reduce your effective retention rate.

[Jubber]

I loved it out there and I did keep about 70% of my money. I was there for a year and used a Dutch management company. I had no choice, the client (major Telecom) insisted ALL contractors used Dutch companies or no gig. Simple.

The 30% (I think it was 35% when I was there) 'rule' part took about two months to come through, but I got all the overpaid tax back. Without it you would pay at least 55% stoppages. Don't talk about it too much to the Dutch - they hate it (obviously) Just keep quiet and earn your dosh and have a good time. The Cloggies are great and they love Brits and hate Germans - perfect

[Turion]

As already said the taxes are high even with the 30% discount and there are a host of other social costs still to pay including sickness insurance. If you're travelling every week you will have many costs as well and these will have to be met from your net pay as there are no allowances. On a Mon-Fri gig you can go 9 months without exceeding the limit and work legally with a ltd co. The biggest problem is finding an agency that allows it. Most clients do not mind either way.

[oracleslave]

does the end client have a uk office? you might be able to work through them in your ltd guise. i did this once and it worked quite well.

WHS

[DS23]

does the end client have a uk office? you might be able to work through them in your ltd guise. i did this once and it worked quite well.

you can either have the 30% or get expenses paid - another reason why i prefer to load up the rate and make it all-in but (without making it explicit!) when working in the netherlands

[BlasterBates]

So if I do a contract in Holland, does my Ltd just sit gathering dust? Or do I still get paid into the business account?

You can register a branch of your Ltd in Holland if you want. This branch then needs to be keep accounts accoridng to Dutch tax regulations, and will pay Dutch tax. You need to then probably employ yourself as a Dutch employee of the branch. You can still be an employee of the UK branch at the same time.

If you were to do this it would probably be cleaner to set up a second Ltd which although registered in the UK is effectively only tax resident in Holland. Many German companies set themselves up as UK registered Ltd companies but are actually German companies, only liable for tax in Germany.

If the contract is less than 6 months you can theoretically run the whole thing through your UK Ltd company. Though because this rule is often abused some agencies maybe wary of doing it.

[expat]

So if I do a contract in Holland, does my Ltd just sit gathering dust? Or do I still get paid into the business account?

Moscow Mule is right in practice, if the agency and client will allow it.

Your Ltd does not gather dust: it still has a mobile phone

But no, you wouldn't want to put your money through it, considering that it's already taxed by the time you get it.

[d000hg]

I guess the big question is if all this messing about actually ends up costing you more or less in tax than doing the same contract back in the UK would?

[Moscow Mule]

Don't take this as gospel, but working for your UK limited using a UK agency can help you to "fly under the radar" of the Dutch authorities.

I wouldn't try to do it for long (less than 6 months), or leave a footprint in Holland - by that I mean don't rent a flat or anything similar that requires your personal details on a contract.

Whether your end client is happy to do that is another matter entirely...

[d000hg]

So if I do a contract in Holland, does my Ltd just sit gathering dust? Or do I still get paid into the business account?

[expat]

This high-rate gig I'm looking at is based in Holland. I've done a bit of searching here and got as far as being confused... it sounds like my Ltd is useless and I will be paid as an individual whether I like it or not, and then there is some weird rule about 30%...

I feel my Ltd is a 'real' company. It works with multiple clients at the same time and on a business-business footing with companies in the US and elsewhere.

Can anyone spell it out in simple terms? For instance what does this 30% mean... that I pay tax in Holland and not in the UK? That I actually get to keep 70% of what I'm paid?

I don't consider that I would be living in Holland. At the least I would be in the UK every weekend and there is also possibility for remote working.

Is it likely that regardless of all this, an agency will insist on whatever they normally do?

1. NL will take it that you personally are working in Holland. That gets you taxed on Dutch income. The question of whether you live, or are tax-resident, in NL is irrelevant to that, it is only relevant to the question of whether you are liable for dutch tax on worldwide income.
2. The 30% rule, designed to obviate the fact that taxes in NL are so high as to scare off people like you, means that 30% of your income is paid to you free of tax. Then you pay Dutch tax on the rest, and you can't claim expenses (except a few local ones).
Note that this 30% dispensation has to be applied for, before starting work, by the employer. It may take a few months to be approved so don't count on spending it right away.
3. This 30% is a feature of Dutch tax law: it means nothing to Hector. So HMRC will look at your total income including Dutch income (not reduced by any 30%), work out the tax on that, then give you a credit for any tax actually paid to other treaty states like NL.
It sounds like the Dutch give you a break and Hector claws it right back, which is effectively what happens; however the Dutch tax even after the 30% allowance is so high that you should find that you have paid almost enough already anyway.
4. I'd guess that agencies insisting on their normal way of working is about a 100-percenter.

[d000hg]

This high-rate gig I'm looking at is based in Holland. I've done a bit of searching here and got as far as being confused... it sounds like my Ltd is useless and I will be paid as an individual whether I like it or not, and then there is some weird rule about 30%...

I feel my Ltd is a 'real' company. It works with multiple clients at the same time and on a business-business footing with companies in the US and elsewhere.

Can anyone spell it out in simple terms? For instance what does this 30% mean... that I pay tax in Holland and not in the UK? That I actually get to keep 70% of what I'm paid?

I don't consider that I would be living in Holland. At the least I would be in the UK every weekend and there is also possibility for remote working.

Is it likely that regardless of all this, an agency will insist on whatever they normally do?