Taxes and social insurances
When you, as the employer, have to take care of employees going on a short or long assignment, both from and to the Netherlands, some questions will most likely spring to mind.
These questions will most likely be about taxes and social insurances and about health insurance and pension in particular.
Your employees will probably be asking themselves similar questions.
Working outside of the Netherlands
When one of your employees will be working part-time or fulltime abroad, you will need to find out if you are obligated to deduct their payroll taxes. For this, it is important to find out what is the fiscal home address of your employee. During a short stay abroad, your employee will remain a fiscal citizen of the Netherlands. You will then still be obligated to deduct their payroll taxes unless the payment will be arranged differently through, for example, a different external agreement. If such agreements are not applicable, the person obligated to deduct the payroll taxes will be regulated according to unilateral contracts.
Even when the employee changes his fiscal home address to the address in the new country, it might be that you are still obligated to deduct the payroll taxes in the following cases:
- Payment concerning working days in the Netherlands
- Subsequent payments (e.g., bonus, holiday payments)
- Profits from shares or option arrangements
- CEO or directors reward policies
Working inside the Netherlands
When an employee from abroad will be coming to work for you, you will have to inform whether you are obligated to deduct their payroll taxes. It is most likely that you are. It is therefore important to determine for exactly what payroll taxes you are responsible. It is important to keep in mind that in the Netherlands, a lot of things fall under payment. Besides payment in money (e.g., salary and bonus), remuneration in kind (e.g., private usage of the company car, housing and refunding of travel expenses) and entitlements (e.g., pension entitlement) are also part of an employee’s payment. Even when these payments are from abroad, it can still fall under the Dutch payroll taxes.
Working with the ESWW tax consultant
The law and regulations concerning international taxes and social security are complex and detailed. Every single different situation raises different questions. We will therefore, together with you, draw up an inventory and provide you with personal tax advice.