Hi all,

I wonder if anyone's ever come across the following situation?

I'm a Brit permanently living in the Netherlands and I've run a hobby website for a while. I'd like to professionalise things a bit by setting up a company and as most of my visitors are in the UK and I'd find it easier to deal with accountancy matters in English, I'm thinking of setting up in the UK rather than over here.

My question is, and this is based on something someone suggested but I don't know if there's any truth to it, would the Dutch authorities look to charge corporation tax on any profits this UK company might make (I realise I'll need to pay Dutch income tax on any salary)?

I wouldn't be buying/selling stock in the Netherlands and as I say, most of my visitors are in the UK, I'd only be sitting at a keyboard which happens to be in NL. Just wondered if anyone has any first hand knowledge or been in a similar situation and might be able to advise?

Many thanks in advance!

Can you tell me what is the nature of the business.
As the way the transaction occurs would effect if you would be under Dutch corp tax or not.

Hi mvn,

Thanks for your reply. Broadly speaking the site (actually sites, I run a couple of 'em) just provides a place for people to chat and learn, the income coming through advertising, e-books I've written which can be downloaded after payment, and possibly training courses in the future (where again the training material would be downloaded after payment).

Could you expand more on how the nature of the transaction affects corp tax liability over here? That would be really useful, thank you!!

hey,
I'm a contractor, based here in Amsterdam. I was talking to my tax accoutnant last month about creating my own BV. She said it was possibel to create a Limited company in the UK, and use it for payrol purposed. all you had to do was open an office here in holland and job done. So use your flat as the dutch offices of your uk ltd company for example. so you get all the easy bits of the ltd company (easy to set up, and a lot cheaper to set up than a BV) but you can still work with it here in holland...

matt

That's very interesting, matt, thanks for that. Do you know if you have to officially declare to someone (e.g. to HMRC or the Belastingdienst) that you've opened an "office" over here?

I'm assuming your accountant didn't mention anything about paying corporation tax over here either?

Ask here in Dutch if you can.
http://www.higherlevel.nl/

Based on what you said, I'd say that it wouldn't be liable for tax in the Netherlands. Your personal income is as you have already acknowledged Good Luck

Thanks everyone, really appreciate the replies (keep 'em coming if there are any more)!

I am in a very similar situation. Currently in the UK and earning some money online (hopefully enough to live on by June) and intend to move to NL later this year.

Currently I declare my tax as self-employment income. This is just another section on my personal tax return. But instead of declaring my income to the Dutch tax authorities with the added complication of possible employment in The Netherlands, I'm probably going to incorporate as a UK Ltd company.

Then when I am in NL I can hopefully just declare any income paid out as receiving a foreign (UK) dividend. It seems to be that this would simplify matters. Of course the tax on a UK company would be UK corporation tax.

But there could be further complications. My income from my website comes via direct payments to my UK bank account, some from Google UK but most paid from the US. Optionally I can change the US sourced income into cheque form or divert it into a bank account anywhere else in the world.

I am therefore looking into the possibility of an offshore or non-UK/NL company as this may be more tax efficient (note: I am NOT planning tax evasion) - although I freely admit I have no clue and need to find out more.

As you can see, online businesses are unique in that the income is frequently coming from overseas. Add to this another layer of complexity - when I work on my websites I am merely sending instructions from the UK. The websites themselves actually exist in the US at the moment. I can switch them to anywhere else in the world if I wish. I believe this is one reason why Panama has invested heavily in data centres and is encouraging websites to be hosted there - I am guessing that the key factor is where your site is located and not where you "work". Treatment of this may differ from country to country, I have no idea what it is in NL.

Probably the best and least complex way is for me to have a UK Ltd company and draw foreign dividends in NL for at least the first year or so, I can't see any problems with that. Then later look at tax efficiency.

As you can see, I've looked into this and am still none the wiser! Even an ordinary tax lawyer would probably be clueless about online business!

Sounds very complicated
bottom line, you must declare all worldwide income irrespective of it being foreign income or you using off shore accounts.
the only way around it is to file as a non resident in the NL, if you can do that, then you don't have to declare this income.

Yep, that's exactly the situation I'm looking at too. I'm trying to get some expert advice from a tax specialist over here in NL just to double-check the Dutch corporation tax angle but he's dragging his feet. If/when I hear something I'll post it here.

I am in a similar but different situation and thought I would mention it, because some of the implications are the same.

I currently own a Dutch Besloten Vennootschap -- BV. I am considering setting up a US based Limited Liability Company (LLC) for a web company. I will maintain the NL BV as a completely separate business entity.

The reason I am doing this is that I do not want the new company to be limited by Dutch tax law (non-transparent and dysfunctionally bureaucratic) and Dutch labour law (inflexible and dysfunctionally bureaucratic).

Are there any others doing something like this? I'm in the research stage, so I'll try to post anything that may be of interest if others are interested.

cheers macavity, i'd love to hear when you find something. I've been meaning to incorporate here soon anyway to get limited liability and to separate better (in my head more than anything else!) my business and personal affairs.

probably i'll do that at the turn of the tax year in april for convenience.

probably in late feb, early march i'll be contacting a uk accountant and a dutch tax lawyer too. many uk accountants aren't even familiar with online stuff - I've been given a chap's name in London who is. If you're interested just send me a PM.

btw there are some tax planners (not really traditional accountants) who are saying that an offshore loan is the best. I saw one such service on here. Stay well clear of these. When they work they are fine - they tell you that you never have to repay the loan and a loan is not taxed. Problem is that the company can be bought by another who takes over the loans and then calls them in! No doubt the UK government could not care less if this happened to you. This has already happened once so I advise to steer well clear of offshore loan arrangements. Please note that these are different from other standard offshore IBC arrangements which are much more common.

Wondering if anyone has any more info on this?

btw I found the double taxation treaty between UK and Netherlands.

http://www.hmrc.gov.uk/manuals/dtmanual/dt14059.htm

Pretty sure that if you have a UK limited company and draw dividends but you are a resident of NL then you pay Dutch taxes.

If the UK company is considered a resident for Dutch tax purposes, the Dutch tax authorities could tax any profits the UK company makes. Your UK company is resident of the Netherlands if its effective management and control is situated in the Netherlands. Whether or not this is the case I refer to http://www.netherlandstax.com/dutch-corpor...ce-requirements.

I would recommend that you use a Dutch company to avoid any discussions with the Dutch tax authorities. Further, the Dutch corporate tax rate is less than the UK corporate tax rate (25.5% vs 28%).

Finally a website in English with good information
thanks for the link

Agreed with!
I don't know much about it but once a friend got screwed against the wall by both countries. He thought he was OK in NL, and OK in UK. He had Ltd co. also, turned out he paid wrong dosh to the wrong country from the beginning.

I think his idea was something along the lines of NL company pays his UK company for a contractor (him) and then he got paid in sterling and taxed in the uk..... but then he got a taxbill to his company (him) from NL.?

He had to leave with a big debt.
never recovered!
and his wife is a mental ######!

ouch!

Whilst lot of the comments go in good directions, here some objections.
Living in the Netherlands and starting own business with a UK Ltd is indeed a option and cost of incorporation a pretty low compared to Dutch entities.
If you incorporate your limited, HMR&C will send you a request for tax return. If the core of your business would be due to qualifying circumstances subject to the AngloDutch double tax treaty, you still have to inform HMRC about this fact, describing your situation, providing proof of tax registry in the Netherlands as well as proof of domicilaition of your company in the Netherlands ( KVK extract). The inspector in charge will usually grant the exemption to file CT600 and considers your company as fiscal dormant. Watch out, this fact does not release you from the annual return and the annual financial statements to be filed at companies house. If your company operates in the Netherlands, you are not qualified to file dormant company statements at companies house, as for the Cardiff your fiscal situation does not matter.
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