Reply to: Netherlands 6 month contract paid in UK

[AngiePie]

So in the end, did you take the job? I'm in a similar situation a v v curious.

[SueEllen]

When I worked for Shell they paid my expenses and I travelled out every week Mon - Thur and was paid through their UK operation. I think this is allowed isn't it?

Depends how long you were doing it for.

Have a look at the website link norrahe nicely posted.

[ribble]

When I worked for Shell they paid my expenses and I travelled out every week Mon - Thur and was paid through their UK operation. I think this is allowed isn't it?

[norrahe]

Netherlands tax authority website

[SueEllen]

How would this work for short term contracts? I quite often do 5 - 10 days consultancy through my LTD in various EEC countries, and just bill the agency (If Involved) a UK rate & VAT, and let them sort out the other stuff. A couple of times I have had a direct contract and just billed the client - less VAT if I have their VAT details, and with UK VAT if I don't.

There is a special exemption in the majority* of EEA countries for short contracts of a few days.

However you need to keep an eye on how many days in a country's tax year over normally 4 tax years of the time you are spending in each country.

*majority != all so you need to check each country out individually.

[BlasterBates]

The fact that Shell is global is actually irrelevant, it's where you work that determines where it's taxed.

Take advice when you get there. If you tax in the UK you run the risk of being hit by the Netherland tax office.

Many contractors ignore this when working abroad and then receive nasty letters sometimes several years after the contract finished, even if they stayed a few months.

Don't ignore the local tax rules. Treat the Dutch authorities with the same respect as you would HMRC. I suspect you wouldn't even think about not declaring a 3 month contract in the UK.

It's much safer to tax (or try to) in the Netherlands, get a letter from them saying your exempt (which won't happen, and proves you should have taxed it) and only then if they refuse to take the tax, tax it in the UK. You wouldn't dream of going to the US doing a small contract and leaving with the money in your back pocket without having first declared that's what you are going to do.

It isn't complicated really any work you do anywhere should be taxed where you do it until some bonafide official tells you don't. The general rule is you can't work anywhere in the world without registering, and getting permission, in the EU you don't need permission but you still need to register. Anything else will lead to trouble if they find out.

[Lovyan]

Well I'm struggling to calculate if it is worth the effort. It is to start in less than two weeks so I would be paying for two properties, no time to rent my home out. The work is for Shell but through an outsourcing company so I don't know if the 30% tax relief would count. Both companies are global so I guess it would be easy to prove I've been employed from overseas. Then there's the need to continue paying NIC in the UK.... I will proceed to see if I am successful and if so I would have to negotiate a higher rate I think. Being new to contracting it is difficult enough to work out what your UK rate should be (in and outside of IR35 etc) so trying to work it out for an oversea's contract and what expenses I will be incurring makes it that much more complex.

I've looked on the oversea's section, but am failing to find links to companies for advice on taxation/ umbrella companies. Does anyone else use one they would recommend? And does anyone know of any online calculators to give a rough guide on converting your rate for different countries?

Thanks for the replies so far, it's been very useful.

[norrahe]

Well it's not a good sign that this agency is giving me bad information prior even to an interview. I guess I'll be giving it a miss then.

Why should you give it a miss, it may be a good opportunity.

You should contact an umbrella company who can deal with Dutch tax regulations and tell the agency that you will be dealing with them. There is a link to such a company on the working over seas part of CUK.

[Lovyan]

Well it's not a good sign that this agency is giving me bad information prior even to an interview. I guess I'll be giving it a miss then.

[norrahe]

I have worked in the Netherlands for a UK agency. This was ten years ago. The situation then was that it is possible to work for up to six months, paying tax in the UK.

If the work continues however (and it did in my case) you would have to work through an umbrella company in Netherlands which deals with the dutch tax issues. I'm am fairly sure the 30% rule still applies to foreign workers in Netherlands. In short it would be more favourable to pay tax there from day one.

S

It seems to be 3 months now and the tax laws are quite stringent. 30% ruling only applies if you are earning more than eur45k . You may also negate your 30% benefit if you register as resident or if you are conducting business as a sole proprietor or as a b.v. from discussions with a Dutch agent you may still be eligible via an umbrella Agreement.
There is a useful booklet on the Michael page website (Dutch branch) regarding contractor options. You can also look at the Amsterdam expat centre website which has lots of useful info.

[Netraider]

Absolutely. Working in NL - pay tax in NL - definitely no shortcuts

How would this work for short term contracts? I quite often do 5 - 10 days consultancy through my LTD in various EEC countries, and just bill the agency (If Involved) a UK rate & VAT, and let them sort out the other stuff. A couple of times I have had a direct contract and just billed the client - less VAT if I have their VAT details, and with UK VAT if I don't.

[sigma]

I have worked in the Netherlands for a UK agency. This was ten years ago. The situation then was that it is possible to work for up to six months, paying tax in the UK.

If the work continues however (and it did in my case) you would have to work through an umbrella company in Netherlands which deals with the dutch tax issues. I'm am fairly sure the 30% rule still applies to foreign workers in Netherlands. In short it would be more favourable to pay tax there from day one.

S

[LisaContractorUmbrella]

Absolutely. Working in NL - pay tax in NL - definitely no shortcuts

[SueEllen]

I am considering a 6 month contract in The Netherlands and have been advised that I would be paid in the UK through umbrella or my LTD company if I set one up, so I wouldn't need to worry about being taxed over there, is this possible? If you're living and working there aren't you liable for tax there? The rate they gave me was in Euro's + VAT.

Don't even bother trying it. If someone accidentally tells the Dutch Taxman then it will be you who pays not the agency.

UK agencies have limited knowledge on other European countries tax laws.

So when an agency tells you that you can work in the same way as the UK I suggest you use the search facility here or google that countries tax laws to check it.

[norrahe]

IT Contracting in The Netherlands: Money & Tax :: Contractor UK

Any of the documentation I've read states clearly that you need to register with a Dutch payroll provider before working over there (I'm looking at moving there and contracting there so have read up on quite a bit). You cannot utilize a UK entity. If you are over there longer than 3 months then you will need to register with the local authorities.