Setting up a branch office in the Netherlands is not this complex, the consequence of a branch office in the Netherlands requires attention. The registration of a branch office results automatically in a registration for the value added tax (VAT) and the corporate income tax. If this branch office also employs a staff, a wage tax registration needs to be applied for.
In order to be able to set up a branch, the branch needs to have an office address in the Netherlands. Most companies offering offices in the Netherlands require a Chambers of Commerce number before you can enter into a rental agreement. And exactly the Chambers of Commerce number is what you receive from the Chambers of Commerce after you registered a branch office. This needs to TLC to brake the circle.
Upon registration a monthly payroll needs to be processed, a quarterly VAT return needs to be filed and an annual corporate income tax return is due. An administration needs to be done for these tax returns. All services Orange Tax Services would like to assist you with.
What if it is only an employee you would like to hire for which you set up a branch office? Branch registration vs employment only registration
If it is only the employee for which you open a branch office, then the branch office could be the more expensive method or it could be the correct method. That depends on the circumstances.
When the employee becomes the representative of the company in such a manner that this employee is to be contacted in the Netherlands, can be visited in the Netherlands at his companies’ address and everything is done in such a manner that it is clear your company has representative present in the Netherlands, then the branch office is the correct method.
Your employee has become a permanent representative which equals the position of having a permanent establishment. Hence your company needs some sort of registration with the Dutch Chambers of Commerce. This can be a BV company or a branch office of your foreign limited liability company.
When your employee is not displayed to the audience being your clients and or relations of the company in a manner that it becomes clear your employee can be contacted at the Dutch known address of the company, the situation is different.
For instance you hired an employee with the skills you need and this employee happens to live in the Netherlands and is not willing to move to your location. Or you have a European representative living in the Netherlands, but is only representing your non Dutch contact details. Or you are located in Belgium or Germany and you hired an employee that mainly works from home, being an address in the Netherlands.
In the aforementioned examples the employee is a Dutch tax resident for which a Dutch payroll needs to be ran. The employee has not become a fixed representative of the company in the sense of a permanent establishment. Hence there is no need to register a branch office.
No Branch office registration required
If that is the case the company does not need to register a branch office with the Chambers or Commerce, which results in no need for a VAT filing nor corporate income tax return filing. A payroll still needs to be ran.
Non resident employer
The solution for this situation is having your company registered as non resident employer. A non resident employer is an employer without any presence in the Netherlands, but that does have employees employed in the Netherlands. For these employees is due Dutch wage tax and social premiums. Without committing to this as employer, and paying a non Dutch salary, results in the employee not being able to benefit from the Dutch social system. The employee is not insured for health care insurance, unemployment, disability. Moreover, the employee cannot make use of the mortgage deduction in the income tax return for the interest he pays in the loan taken out to purchase the home he is living in.
Orange Tax Services
We can facilitate both the branch office with its need to file the wage tax return, value added tax return and corporate income tax return. The administration can be done by your administrative department abroad, or we will be glad to assist you with the Dutch bookkeeping.
The non resident employer we can facilitate with the registration, payroll process and if needed making the payments on behalf of the employer to the employee and Dutch tax office.
Feel free to contact us to request for a quote of our services. We work for all services at fixed fees, except for bookkeeping and tax advice.