Working on the continent

bunglemark2

Looking for advice and assistance here please...

I have been offered a contract, initially 6 months starting November, but a rolling one (or so I'm told), which will be through a German recruitment agency with their German client, the work location being however in the Netherlands.
As an Irish citizen, I am confused over whether I should :
setup a limited company in IE and invoice the recruitment agency in DE;
go through an umbrella company in IE and do the same;
or setup a limited company in DE and invoice the agency over there (furthermore, is it possible to use an umbrella company in DE - do they do that over there ?)

I've read confusing threads about the 183-day rule, that even if I fly home to IE at the weekend, I will be deemed resident in NL (speaking of which, is it academic where the work location is, even though the 'contract' of employment is with a DE entity ?). Basically, I'm wary of becoming liable for tax both in my local jurisdictions as well as DE, and primarily would hope if possible to preserve my social security payments in IE for when I do pick up employment here. As you can see, I don't see this as a long-term option (the contracting, that is), merely a must-do in the current climate.

Can anyone provide assistance or advice, or even recommendations for contacts in DE or IE with whom I can discuss the options and the most tax-efficient solution(s) ?

Many thanks

not even wrong

There is a tax treaty between Ireland and the Netherlands so no matter what happens you shouldn't have to worry about paying double tax.

Jim2007

Work through a German or Dutch umbrella company as it is the simplest and most cost effective way to go. This is the most common way that contractors operate in Europe and I'm sure your recruiting agency will be able to come up with a solution In theory you might save some money by not using an agent, but in the end you'll probably end up spending it on accounting and legal fees...

As regards taxes, it should not really be a problem... Just contact the Irish Revenue and tell them you're leaving the country and want to settle up with them , they'll tell you what the procedure is (can't remember it's a long time ago since I did it) and then just register in the Netherlands and that should be an end to it. If the Irish Revenue do come after you later, don't worry... there will be some red tape, but in the end you will not have to pay taxes twice as there are agreements in place to ensure this does not happen.

To make life easier for you later, should the Irish Revenue start asking questions I would recommend:
- Open a bank account over there and have all monies paid in to it, do not have it payed into an Irish account.
- Keep careful track of all cash you transfer back to Ireland
- Keep track of all major expenses such as rent, books, training course etc...
- Keep track of all trips back to Ireland

On a personal note I would also suggest you sign up for language classes once you get there as it will help you fit into the new environment and also let you meet people in the same situation as yourself.

Good luck with that,

Jim (Switzerland)

bunglemark2

Jim2007 wrote: »

Work through a German or Dutch umbrella company as it is the simplest and most cost effective way to go. This is the most common way that contractors operate in Europe and I'm sure your recruiting agency will be able to come up with a solution In theory you might save some money by not using an agent, but in the end you'll probably end up spending it on accounting and legal fees...

As regards taxes, it should not really be a problem... Just contact the Irish Revenue and tell them you're leaving the country and want to settle up with them , they'll tell you what the procedure is (can't remember it's a long time ago since I did it) and then just register in the Netherlands and that should be an end to it. If the Irish Revenue do come after you later, don't worry... there will be some red tape, but in the end you will not have to pay taxes twice as there are agreements in place to ensure this does not happen.

To make life easier for you later, should the Irish Revenue start asking questions I would recommend:
- Open a bank account over there and have all monies paid in to it, do not have it payed into an Irish account.
- Keep careful track of all cash you transfer back to Ireland
- Keep track of all major expenses such as rent, books, training course etc...
- Keep track of all trips back to Ireland

On a personal note I would also suggest you sign up for language classes once you get there as it will help you fit into the new environment and also let you meet people in the same situation as yourself.

Good luck with that,

Jim (Switzerland)

Cheers for that Jim

I was a bit undecided as to whether I should avail of the services of one of the many 'contractor services' companies in Ireland or not i.e. working under an IE umbrella company. Then again, can you explain why this would not be the most effective way to do it ?
What I'm also trying to consider is, in the event that I finish up over there and having nothing to come back to, about coming back to IE and potentially having to sign on to the live register - is there a way to 'transfer' social security payments so that my stamps are up to date ?
The contract of employment will be with a German agency for a German client (even though the work location is in NL), so presumably I would set up a German bank account and have funds paid into that (?).
Can you perhaps advise on whether flights & accommodation can be 'written off' (or at least the VAT reclaimed) if I'm only there Mon-Fri ? The other option I'm considering is renting somewhere by the month, as it would seem to be a cheaper option than hotel rates - presumably this is a valid business expense and one which the DE umbrella company would factor this in.
As you can see, I'm a bit of a novice at this and you seem to be fairly experienced so any help welcome.
I'm not worried about the language thing - I speak German and the office language is English/German (both of which I speak ) so no worries on that front.
Thanks again

qwertz

I have been in a similar situation last year but decided not to take the offer I had. Back then I was told by the agency (after numerous discussions) that I must contract through a German-based company to be legal.

My situation might be different to yours since I was going to be on a daily rate (real contractor, not fixed-term employee of theirs).

bunglemark2

Well, I won't be on a fixed-term contract or anything like that. It's a daily rate contract for 6 months to start, but it's a rolling contract.
I'ts been suggested by a contact over in Germany (another guy in the recruitment business) that I invoice thru either my own ltd. company or thru an umbrella company here in IE. Jim (previous poster) reckons this isn't the most efficient way to do it though - now I'm seven shades of confused

Again, I don't know if the fact that the 'employer' (the agency) is in DE and the work location (for purposes of flights and accommodation) is in NL, has any relevance - perhaps not - but I'm just looking for the best advice on the logistics of : set up a limited company in DE/NL; go through an umbrella company in DE/NL; making sure tax and social security payments are above board in local country; ditto as far as the Revenue here is concerned....

Jim2007

When dealing with the world of officialdom it is alway best to keep it as simple as possible!

I think it is very important that you clearly establish residence in the Netherlands, that means renting a place, opening a bank account and being employed there and so on.

That will make it much easier to deal with any tax issues that arise in relation to Ireland and more importantly it will also mean that your social security contributions in the Netherlands will count for something!

With respect to unemployment benefit, if you do things by the book, then your contributions in the Netherlands will be taken into account in Ireland when determining your entitlement to unemployment benefits. By the same token your contributions in Ireland will be taken into account in the Netherlands, should you decide to stay on there and seek more work there. You should check out the rules and documents required on the relevant websites, as I have never had to deal with the situation myself.

But I doubt you'll need to worry about being unemployed, if you are good at what you do there is always a fair bit of contract working available in the Benelux.

As regards the expenses, most agencies have ways of dealing with this, which should result in it coming of the top - that is salary before taxes, just ask them how they handle it

Good luck with that,

Jim

Jim2007

bunglemark2 wrote: »

Well, I won't be on a fixed-term contract or anything like that. It's a daily rate contract for 6 months to start, but it's a rolling contract.
I'ts been suggested by a contact over in Germany (another guy in the recruitment business) that I invoice thru either my own ltd. company or thru an umbrella company here in IE. Jim (previous poster) reckons this isn't the most efficient way to do it though - now I'm seven shades of confused

Not the way to go, because you will end up having to deal with all kinds of red tape concerning VAT for a start and then there will be issues with paying the social welfare contributions. On top of that you will end up being taxed twice - first corporation tax for the company and then income tax on everything you take out of the company. On top of that there is an additional tax in Ireland for service companies, where these companies are just one man operations.

bunglemark2 wrote: »

Again, I don't know if the fact that the 'employer' (the agency) is in DE and the work location (for purposes of flights and accommodation) is in NL, has any relevance - perhaps not - but I'm just looking for the best advice on the logistics of : set up a limited company in DE/NL; go through an umbrella company in DE/NL; making sure tax and social security payments are above board in local country; ditto as far as the Revenue here is concerned....

It is where you reside that is important in deciding on the tax and social welfare issues. And as I already pointed out setting up a company in the Netherlands will end up being an expensive exercise...

Best Regards,

Jim