The one client company also known as the ZZP company, is that a company for tax purposes? Yes it can be.
One client company – is this ZZP company a company?
The one client company is a problem for the Dutch tax office. If you google about this topic you read that one client is no client and you actually have an employment relation with your client. But is that true?
Yes, partly that could be true, but what is this about? This is about tax and social premiums. The Dutch tax office does not want the employee to terminate his job the one week and to return to the same company the next week, doing the same job, but then self-employed. The difference is that the employer no longer needs to pay social premiums for this former employee. The employee can charge a lower hourly rate and yield net more, as he claims for the entrepreneurs tax deductions.
This is eroding the Dutch tax base and in conflict with the thought of our social system, hence the tax office is battling actively these kind of setups. With success.
Can there be a one client company?
We think there can be a one client company, but the conditions are very much different from the above mentioned set up. On a daily basis we are asked about this possibility, as internationals receive conflicting information.
You can have a one client company in the following situation. You have moved to the Netherlands and you would like to continue working for your foreign employer. Or you have found an employment opportunity abroad that you can work for from home. The rule is that employment is taxed in the country where the employment is being done. So these foreign companies should register in the Netherlands and set up a payroll. We will be glad to assist them.
However, most employers, especially from the USA, are very afraid for being exposed in the Netherlands. The foreign company cannot oversee what will come at them, if they register. We can understand that, even though we do offer solid solutions. So you can work for a company in a foreign nation, but that company is not willing to set anything up in the Netherlands. What can you do? Indeed, you can invoice this foreign company instead. You have then become from an employee an entrepreneur.
Can the tax office hold this against you? We think they cannot, as the alternative is that you can no longer earn an income with this foreign employer. Or even worse, the foreign employer simply runs you in the foreign payroll administration. Unless you physically go to work in that place, this is absolutely incorrect. When the situation is explained to the tax office, the one client company will stand.
Moving from employment to entrepreneurship – how is that?
That is not for everyone. If you change your employment due to the conditions into an entrepreneurship make you lose rights. Right to income, right to unemployment benefit, right to disability benefit. You now need to arrange those benefits yourself via insurances and you will learn how expensive that is. The insurance premiums is tax deductible, but still expensive.
Another important aspect is that the former employer can easily terminate now the working relation as no protective rules are in place for the business to business working relation.
One client is no client
Last but not the least, one client is no client. That implies the day your client decides no longer to work with you, is the day you have a serious problem. Hence we always try to inspire clients with one client to get more clients, and to see the fun of having more clients.
Tax is exciting
The employees from abroad that contact us for working in the Netherlands we initially try to help them set up a payroll administration for the foreign employer in the Netherlands. With the so called 30% ruling, the Netherlands is a good alternative.
Often the foreign company is too afraid for the Dutch exposure, so a one man company is set up. A one man company stands for 1 person owning the capital, but you can also be a woman and you can employ as much employees as you like.
We can advise you before you register, help you with processing the books, file the quarterly Value Added Tax returns and file the annual income tax return. We work with fixed fees, please inquire about our fees and we are excited already to assist you.