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Non resident employer

Your company operates internationally and you recently hired a representative in the Netherlands. This employee is the only person working for your company living and working in the Netherlands and you have no office in the Netherlands. How to process this payroll?

The simple answer is that the employer becomes a non resident employer in the Netherlands. This registration results in the company only becoming exposed in the Netherlands for wage tax and social premiums purposes related to this employment and nothing else. Not value added tax obligation, not corporate income tax obligation.

Dutch tax law applies

The employee is employed under Dutch rules, Dutch wage tax is collected and Dutch social premiums. The employer is provided with a journal related to this employment for the local bookkeeping. That implies the Dutch costs reduce the local result.

The employee is able to apply for the 30% ruling if applicable, can use the mortgage relief facilities and all other Dutch income tax benefits.

The moment more employees are employed, these will be simply added to the payroll. When no employee is being employed anymore the registration is terminated.

Umbrella services

Only in case the employee is not working for your company but is placed at a site of another company, then anti exploitation rules apply. That implies your company cannot be registered as non resident employer, a Dutch Chambers of Commerce registration is required or the use of a umbrella payroll service.

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