Contracting

Contracting for expats in the Netherlands is possible either through a payroll company or by using a new or your existing local company. Depending on the residency of your company, it can be possible to only be liable for payroll tax in the Netherlands by registering your company with the tax authorities for payroll tax purposes only.

Basically, what happens when you register your company for payroll tax is that your local company temporarily outsources you to the Netherlands. Your company will run a Dutch payroll and take care of all the payroll tax obligations in the Netherlands. The salary you grant yourself has to be reasonable, but doesn’t necessarily have to be equal to the invoice you send to your client. If you grant yourself a smaller salary, the remainder will be a profit for your local company and taxed according to local tax rates.

Your local company has to register with the tax authorities as a withholding company. In order to register, the following information and documents are required.

• name and address of your company;
• name and address of your local tax adviser;
• tax registration number in country of origin;
• declaration from local tax authorities;
• copy incorporation deed;
• copy extract local Chamber of Commerce.

If you consider this procedure to be to much administrative hassle and if the Dutch assignment is only for a short period of time, it is possible to have the payroll done through a so-called payroll company. In this case this payroll company will take care of the payroll tax obligations on your behalf. This is a more expensive solution, but it saves you substantial administration.

Working through a payroll company will also give you coverage for unemployment benefit and disability benefit in the Netherlands. This coverage is quite expensive, around EUR 6,000 per annum. Working through your own company you will not have this coverage.

In general the choice on the direction you take is based on the duration of the contract. The longer the contract the higher the benefit of running your own payroll will become.

Using both methods it is possible to obtain the 30% ruling.

We can help you to determine what is more beneficial in your situation.