Newsletter March 2004


The tax season has started! A lot of expats have received their blue envelops and many have already decided to send them to us. Because of the extra capacity we can keep the turn around time much shorter then previous years. But be quick if you would like to file it before April 1st! Otherwise we can always arrange a time extension.


So if you would like Expatax to take care of your tax return don't hesitate any longer! Look at www.expatax.nl/taxreturn.php for more information.


In this newsletter:

1. Co-operation between Expatax and Europlan terminated
2. Working in the Netherlands on a foreign payroll
3. Letter from the tax office: non earning partner from expat with 30% ruling
4. Tax office: problems with the provisional refunds for 2004
5. Extra territorial costs
6. Spotlight on a business
7. Unsubscribe

1. Co-operation between Expatax and Europlan terminated

 

Last month we have decided to end the working agreement with Europlan. We have chosen to look for other solutions for our clients and we have found an advisor we already knew who is able to assist our clients with all their questions about investment and retirement planning. We have full confidence that the quality of his advice is high and will be focussed on the specific situation of an expat in the Netherlands.

Our advisor is based near Amsterdam, has been an expat himself, is well experienced in the offshore business but also full aware of all the Dutch rules. This combination has made us decide to start working together as of March 1, 2004. If you would like to arrange an appointment or want to discuss your current investment or retirement portfolio feel free to contact us. On our website you will find links to the relevant sections. We can unfortunately no longer help you with questions you have for Europlan but if you recently did business with Europlan we are always interested to know.

2. Working in the Netherlands on a foreign payroll


As soon as somebody starts working in the Netherlands he/she must get a sofinumber and be put on a Dutch payroll. We often experience that expats have been working in the Netherlands under a foreign payroll. Officially this is not right. The Dutch tax laws and our treaties state that tax must be paid in the country where you work. So that would be the Netherlands. Irrelevant is the fact that there is a contract with a foreign employer, the salary is paid in a foreign currency etc. If a Dutch payroll is not setup for this employee the employer can have a huge problem when the tax office finds out during an audit of the payroll administration. 100% fines raised with interest are not imaginary.

A lot of times clients refer to the 183 days rule. This rule means that if you have been working in the Netherlands for less than 183 days in the calender year no tax has to be paid in the Netherlands over the salary. But this is only applicable when the employee is sent abroad by a foreign employer to work in the Netherlands whereby the employer doesn't have an office or branche in the Netherlands. In most situations however the employer will have an office here. Even if the 183 rule is applicable, still a payroll administration must officially be setup for this employee. In the income tax return the 183 rule can then be used whereby the tax can be claimed back.

We work for several foreign contracting agencies and take care of several payrolladministrations in the Netherlands. If you have a question or would like us to assist you with your payroll administration feel free to contact us or look at www.expatax.nl/payrolling.php


3. Letter from tax office: non earning partner from expat with 30% ruling


Recently the tax office has sent letters to partners without income. Up to now the file from a partner without income where handled by the local tax office while the file from the other partner who has the 30% ruling was handled by the tax office in Heerlen. This has lead to a lot of communication problems and a lot of letter of objection from our side. These letters had to be sent since the tax office first refunded the personal tax credits to the non earning partners and later claimed them back saying they didn't have a partner with sufficient income. A link with the tax office in Heerlen could not be made immediately. These problems should be prevented in the future.

If you have received this letter you don't have to take action.

4. Tax office: problems with the provisional refunds 2004


The tax office has notified us that they experience problems with the provisional refunds. This means it can take a little more time before the money is refunded. The tax office is dealing with the problems and will make sure that everything will be solved as soon as possible.

5. Extra territorial costs


If you are working in the Netherlands as an expat your employer can reimburse several costs of your temporary stay in the Netherlands tax free under certain conditions. These costs are known as the extra territorial costs. If applicable the employee can also be granted the so called 30% ruling. For more information about this ruling see www.expatax.nl/30ruling.php. If the 30% ruling is granted the employee doesn't have to prove that he made costs up to the amount of the 30% allowance. It will then be approved that the allowance covers the extra territorial costs.

The employer can however decide to reimburse the real extra territorial costs. This can be done if the costs are higher then the 30% allowance or when the 30% ruling is not granted. Besides the allowance for the extra territorial costs the employer can still use the other possibilities regarding the normal labourcosts.

The secretary of State has recently announced which costs can be reimbursed tax free as extra territorial costs and which costs will be treated as normal labour costs. If the 30% ruling is granted and included in the payroll administration then the extra territorial costs can't be reimbursed again separately, but the normal labour costs can (under certain conditions).

  1. cost of living allowance for the extra/higher costs in the Netherlands: can be reimbursed tax free as extra territorial cost
  2. foreign service premium / expat allowance / overseas allowance: will be taxed as normal salary
  3. relocation expenses / moving allowance: tax free up to a certain level under the normal rules
  4. househunting / acquintance trip: can be reimbursed tax free as normal costs or extra territorial costs depending on the situation
  5. costs of permits: costs of residence permits can be reimbursed tax free as extra territorial costs, costs of work permits can be reimbursed tax free as normal labourcosts.
  6. storage expenses: if the furniture will be moved to the Netherlands then these costs fall under the normal rules for the labourcosts otherwise they can be reimbursed as extra terrotorial costs.
  7. Losses (for example on sale of property or car): will be taxed as normal salary
  8. free accomodation / housing: if a property is kept in the home country then the extra costs in the Netherlands can be reimbursed as extra territorial costs, otherwise it will be taxed as normal salary but under specific rules
  9. reimbursement expenses purchase house / brokers fee: will be taxed as normal salary
  10. utilities: it may be possible to treat these costs as extra territorial costs, see 1
  11. home-leave / travel costs: travel costs for travel between the Netherlands and the home country are treated as extra territorial costs
  12. costs of a tax advisor: costs for the Dutch tax return can be reimbursed as extra territorial costs
  13. tax-equalization: will be taxed as normal salary
  14. language courses: can be reimbursed tax free as extra territorial cost
  15. Phonecosts: tax free up to a certain level under the normal rules, part which sees on the extra costs for calls to the home country can be treated as extra territorial costs
  16. Food: tax free up to a certain level under the normal rules

6. Spotlight on a business


Under our clients we have a lot of expats who are working freelance or have their own business. For them we would like to offer some free extra exposure. Expats helping expats. If you are a business client and would like to be mentioned in our newsletter please let us know. The first turn is for Firefly Coaching.

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A Business Owner -> Transitioning to create a more profitable business
A Professional longing for a Different Job -> Transitioning to a new career

 

Would you like to make your Transition FASTER and EASIER? I can help you, I am a Personal & Business Coach supporting professionals like you in making Smooth Transitions!

 

The best way to understand what coaching can do for you is to experience it! I offer a 30-minute, free no obligation telephone coaching session that is designed to do three things:

 

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3) Find out if we are a good fit for each otherIf you are willing and ready to make some big chances AND have fun doing it.

 

7. Unsubscribe


This newsletter is sent to all the persons who have contacted us in the past, are clients or have subscribed to the mailinglist. If you don't want to receive anything from us anymore just reply to this email and mention that you would like to unsubscribe from future mailings. We will then delete your emailaddress from our systems. We do not harvest email addresses from other sources. If you have any questions about the above you can always contact me. Feel free to forward this newsletter to other persons who you believe may be interested in receiving it. They can subscribe to our mailinglist on http://www.expatax.nl/newsletter.php.