The Dutch authorities will not accept self-employment unless there is a degree of commercial risk and you have several clients for whom you carry out work concurrently. Before 2016 it was possible to apply for a VAR certificate that allowed clients to pay a supplier of service gross without the potential risk of having to meet any unpaid tax and social security liabilities themselves. This security blanket for employers will now be removed from 1st January 2018 the DBA law will come into force and working as an employee will be the only safe way for a client to engage contractors. This therefore is the only way that The Payroll Advisor B.V. can work with contractors working in the Netherlands.
Contractors in the Netherlands engaged to work under the control of another party are considered to be labour-leased and therefore must be employed through a Dutch payroll from the start of their work assignment.
On our Dutch payroll you will be subject to Dutch wages tax and social security from the start of the contract. If you are still tax resident back home, then you will not be taxed twice on the same income and any tax paid in the Netherlands would be allowed as a credit against tax due in your home country in respect of that income.
Social insurance is payable in the Netherlands. The lower two tax bands in The Netherlands are made up predominantly of social insurance contributions. Please note that under our solution you, the contractor, are responsible for both the employee and employer social charges.
The citizen service number (BSN) is a unique personal number allocated to everyone registered in the Municipal Personal Records Database. Your citizen service number is recorded on your passport, driving licence and identity card. The citizen service number replaces the social security and tax number (SoFi number) but consists of the same digits. Persons with a SoFi number who are not registered in the Municipal Personal Records Database will still have their SoFi number.
A skilled contractor, who is not Dutch or a Dutch resident, is entitled to apply for an expatriate tax concession. Once approved, this allows for 30% of your gross income to be exempt from income tax and social costs. The maximum term of the 30% ruling is 8 years. This 30% ruling (which we will apply for on your behalf) will apply from the beginning of your assignment but note that until approved you will initially be taxed on your full gross income. This 30% ruling is in lieu of expenses.
There are further allowances that may be claimed called Extra Territorial Costs Allowances in addition to the 30% Ruling.
NEN 4400 CERTIFICATION, SNA REGISTRATION & THE ABU COLLECTIVE AGREEMENT
TPA BV is NEN 4400 certified. This provide assurance to you and the Dutch client that TPA BV is competent in payroll matters and that taxes and social costs will be withheld and deposited as required in the Netherlands. Where a client insists that they will pay a portion of the contract value into a G account which is used exclusively for the payment of tax and social security, the proportion demanded is usually much less than it would be to a payroll company that is not NEN 4400 certified.
TPA BV is registered with the Dutch Labour Standards Foundation (Stichting Normering Arbeid – SNA).
As a condition of NEN 4400 certification TPA BV follows the ABU collective labour agreement (CAO) applicable to temporary workers.
The STIPP pension scheme is compulsory for everyone who works in the personnel services sector, as a temporary employee or as an employee of a payroll company or secondment agency. The STIPP pension contribution is applicable after 26 weeks of continuous employment with the same employer. From 26 weeks to 78 weeks of employment, the contribution is solely paid by the employer at the rate of 2.6% under the Basic pension plan.
Contributions to the Basic pension plan stop after 78 weeks of employment and the Plus Pension Plan starts from the 79th week. In the Plus Plan, the total contribution rate is a combined 12% being 8% from the employer and 4% from the employee.
The pension capital (the amount of revenue collected during the pension scheme) is taxable if withdrawn before retirement age. STIPP will deduct tax at source on any payment or withdrawal.
The pension capital is paid immediately by STIPP, when the employee stops working in the personnel services sector as a temporary employee and need not wait until retirement.
After two years, the employee can request a surrender if he no longer works as a temporary employee in the Netherlands. There are rules and limits attaching to the surrender.
Expatriate employees can also withdraw their pension capital, upon leaving the Netherlands.
There are some administrative charges (or fund management fees) charged by the pension provider (STIPP) and these will be deducted from the contribution amount.
PRIVATE MEDICAL INSURANCE
The Health Care Insurance Act will if apply you live and/or work in the Netherlands. You are obliged to take out a basic insurance policy, referred to as the ‘Standard Package’. You can find further information on the following sites: www.kiesbeter.nl/ and http://www.zorgwijzer.nl/zorgvergelijker/english
ONLINE TAX CALCULATOR
We have now gone live with our online Dutch Tax Calculator which you can find at www.thepayrolladvisor.nl/calculator so you can check your likely retentions. You will still find us to answer your questions on the Online Chat or at the addresses below.
This solution is aimed at you:
- If your client demands a Dutch Umbrella company, this is the best option for you.
- If you are a Dutch tax resident, as you receive the benefits of StiPP and the ABU Collective Labour Agreement.
If you want to find out more, please contact:
Luxembourg, Belgium and The Netherlands
Tel: +352 621677847