Tax between EU states when contracting

Kipperhell

I am looking at taking a 6 month contracting job in the Netherlands. As I would with a contract here I would use a company. From what I gather I would pay tax in Holland and may have to pay additional tax here if there is a difference between the two. Is this right?

It is all hypothetical as I am only applying but I need to know my tax situation to judge the rate I would need.

My understanding would be I would be able to write off the accommodation against tax. Travel would also be considered an expense either for me to go home or my wife to come over.

That is assuming I use an Irish company rather than a Dutch one and I am not even sure if I might have a better option by registering in the Isle of Man or something along those lines. Really not sure and I will of course contact an accountant when I actually decide but some idea would be appreciated:)

colrow

I worked in Holland for 6 months a couple of years ago, the UK side of the company paid the agency in sterling, who paid that over to an Irish umbrella company (prima). Be careful, if I'd worked for the dutch branch, there was all sorts of stuff to comply with, for example you cannot open a bank account over there without their version of prsi etc, plus I was provided with accomodation, my flights food expenses etc were repaid via the agency.

Kipperhell

colrow wrote: »

I worked in Holland for 6 months a couple of years ago, the UK side of the company paid the agency in sterling, who paid that over to an Irish umbrella company (prima). Be careful, if I'd worked for the dutch branch, there was all sorts of stuff to comply with, for example you cannot open a bank account over there without their version of prsi etc, plus I was provided with accomodation, my flights food expenses etc were repaid via the agency.

I think I would be working in a slightly different way but what I am really interested in is the tax. Did you pay Dutch or Irish tax? Which is higher? I wouldn't bother with an account over there unless it was best to have a Dutch company.

Did the agency actually pay for your expenses in full?

colrow

The Dutch authorities are very strict with foreign national employment and insist that any potential contractor register immediately for local taxes and social security. Our accountant associate will assist with the registration formalities and you would become an employee of our in-house management company, which is a Dutch registered and accredited Payroll provider.

The potential downsides are the Dutch high rate of Income tax (up to 52% at your marginal rate) and the need to register from day one. The Dutch authorities recognised this may be a deterrent to any potential foreign worker and to offset this offer, what is called, ‘Expatriate’ concession to employees who are registered for payroll, with a 30% ruling. What this means is, the top slice (30%) of your income is free of tax. Please note that registration needs to be completed from the start of your assignment to gain this concession! Any delay could severely hamper your/our ability to back date and recover your position.

To obtain the concession you will be required to attend the local tax office in person, taking your Passport with you, which will be copied for their records, and you will then be issued with your Dutch tax number. You may also be required to register with the local police for local residency tax, depending on your residency location. The accountant will arrange to meet with you in person to assist and help obtain the required documentation for all registration requirements. The costs associated with the above will be covered within our complete service package.

All Dutch taxes, social security and insurances associated with the contract will be handled by Gems, in conjunction with our Dutch associates, and paid directly to the Dutch authorities on a regular and timely manner. We will account to you for all earnings over the term of the contract with monthly pay slips and accounting schedules provided for your records.

We will supply the contact details of the accountant and Gems will assist and help you every step of the way. We will also assist with providing the best possible advice for savings and investment opportunities and liaise with your preferred financial advisors. If you require the services of an Independent Financial Advisor we would be happy to make you an introduction. GEMS do not receive commissions for successful introductions.

For additional information please contact the office where a member of staff will be happy to discuss the opportunities that working in Holland has to offer

colrow

Hi kiperhelll

I forgot to add in the above post, I got this info from googling "working in holland tax"

Kipperhell

colrow wrote: »

Hi kiperhelll

I forgot to add in the above post, I got this info from googling "working in holland tax"

That would explain it that isn't really the situation we are talking about and I think that applies to non-eu residents. Technically speaking I would be a company in my own right working in Holland. Whether I am dutch, irish or another foreign country company is part of the issue.