Netherlands

Introduction

The Netherlands, which is also known as Holland, is located in Western Europe although it also has areas in the Caribbean.  It borders Germany and Belgium and has six official recognised languages.

The Netherlands is known for its social tolerance having legalised abortions, prostitution, euthanasia and also having a very liberal drug policy.  It also showed support for the women’s suffrage movement and was the first country in the world to allow same sex marriages.

Its port in Rotterdam is world renowned and is the busiest seaport in Europe.  Schiphol airport is the third busiest airport in Europe.  The Netherlands is a founding member of the EU, Eurozone, G10, NATO, the OECD and the WTC as well as being part of the Schengen Area and the Benelux Union.  It is host to many intergovernmental organisations and international courts and due to its tolerant and fair nature is utilised in order to settle many disputes hence The Hague’s reputation as the World’s legal capital.

The Netherlands has a mixed market advanced economy which always ranks well globally.  It ranks extremely well for political and economic freedom as well as quality of life and happiness.

The Netherlands certainly hold a natural appeal to persons who appreciate open minded fairness and tolerance, its location and diversity are also enticing.  If you are looking to freelancer abroad then it certainly has a lot to offer.  Here at Chesterfield we can appreciate the subtleties involved in working as a self-employed contractor abroad and are here on hand to answer any questions and offer any advice that may be applicable.

Registry/Registration

The Netherlands is one of twenty six countries consisting of what is known as the Schengen Area and therefore if you are from one of these then it has one common visa and no border controls.  If you are from a country that is a member of the EU then you may also live and work in The Netherlands without restriction, however if your country is a new member it may not be covered in this and it is best to check before making any plans.  Despite the lack of restrictions if you plan to stay longer than four months then you are expected to register and get a citizen service number, which is your social security and tax number.

For all other countries then you will most probably need a provisional residence permit.  There are different types of resident permits for The Netherlands, but you can get a combined residence and work permit.  One option is for highly skilled migrants, this involves a customer making an application on your behalf though.  This customer must be an IND recognised sponsor.  The Netherlands has an international and multilingual workforce and highly skilled workers are welcome, so providing that you have a sponsor applications can have incentives and be fast tracked and therefore The Netherlands is a lot more appealing than other nations that have various restrictions to ensure that locals get first dibs on all the jobs

Income Tax

Even as a self-employed person or freelancer you must pay income tax in The Netherlands, you declare this on your annual tax return.  As stated above The Netherlands welcomes skilled expats and can offer incentives, one such incentive is the 30% reimbursement ruling, this reduces the taxable amount of your income from 100% to 70% and so is worth looking into whether or not you are eligible.  There are also certain self-employed tax credits that you will be eligible for and possible tax benefits that you need to look into depending on your circumstances.

As of 2020 the income tax rates in The Netherlands are as follows:-

Up to €20,711             36.65%

€20,712–€68,507        38.10%

€68,508+                     51.75%

Social Security

There are national insurance schemes that do apply for self-employed or freelancers in the Netherlands, but it should be noted that illness, invalidity or unemployment are not compulsory and therefore if you wish to be covered like a normal employee you will need to look into making additional arrangements.  Healthcare is also covered separately in the Netherlands and you will need health insurance.

Social security is done together with your income tax and needs to be paid at the beginning of the year.  This will need to go on your declaration along with your income tax which is to be filed before the 1st April.  The rate is 28.15% of your income, but it should be noted that this is capped and you will only pay this percentage on income up to €33,589.

Employment Rules

The Netherlands recognises freelancers and does have structure in place for their individual needs.  For instance there are regulations in place with regards to employers so that they can outsource work to individuals via a model agreement and therefore there is no traditional employment relationship so even though the employer is still responsible for providing a safe and healthy work environment they do not need to consider as many aspects as they would if you were an employee, such as withholding payroll taxes or social security contributions.  It is important for self-employed contractors to understand the arrangement in the Netherlands with regards to this as they may need to prove they are independent from their clients otherwise they may find themselves being considered as an employee.

In this regard you need to work in an independent way, such as on specific projects with a specific target as opposed to being allocated work and being told how to do it.  You will need to keep an accurate record not only of your invoices, but hours worked, this can also have tax benefits whereby expenses can be taken into account and there are certain tax breaks if you work over a certain amount of hours.

Chesterfield can assist with the various aspects to ensure not only that you meet the requirements in order not to be considered an employee, but also that your accounting is in order and you receive any benefits that you are entitled to

Banks

The main issue with getting a bank account in the Netherlands is if you do not speak the language.  To this effect it should be noted that ABN AMRO and bunq are possibly the only banks in the Netherlands that have detailed information in English.

You will usually need to visit the branch in order to open a bank account.  You will need to bring your BSN number as well as valid ID and proof of address, you will also need your residency permit if you are not from the EU.

The Netherlands has been at the forefront of the technological banking revolution and as a result a high number of their residents use online banking and over half use mobile banking for the majority of their daily needs.

Corporate Structures

If you wish to freelance in The Netherlands we offer a variety of solutions.  In addition to assisting you with perhaps setting up a one-person business in the Netherlands we also offer payroll solutions such as self-employed services and employed payroll services.  We have already covered that the Netherlands has specific criteria in order to be truly classed as a self-employed freelancer and that with the benefit of good accounting skills you can profit from expenses deductions and a variety of tax incentives and therefore we can provide the local accounting support in order that you get the most out of your time whilst contracting in The Netherlands.

Chesterfield and Contracting in The Netherlands

The Netherlands is an attractive country when considering contracting abroad, its tolerant reputation combined with its inviting attitude towards international freelancers along with its location and access to Europe and its multilingual skills put it in a class above the rest. Chesterfield has years of experience with contractors and freelancers from all over the globe each with their own individual skill set and  requirements and therefore we completely understand the need for a member of staff that is geared towards understanding your individuals needs and to this effect you will be given a dedicated member of staff who is responsible for all your administration and contacts, allowing them to be more in tune with all your needs and assist you in every way possible.