Dutch payroll tax explained

In recent years, economic change has prompted a focus on flexibility in the Dutch labour market. This has created a demand for payrolling, which in turn provides excellent opportunities for domestic and foreign payroll service providers. However, operating in the Dutch market requires a thorough understanding of Dutch payroll tax. Legal liability is differently in each country and so the Netherlands is no exception to this rule. The Dutch tax system can be complex and to properly understand the details may use up a lot of time. That is why we offer services to help you deal with Dutch payroll tax.

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What do you need to know about Dutch payroll tax?

Under Dutch law, each foreign company that assigns workers to the Netherlands automatically becomes a “virtual resident” of the Netherlands. Therefore, employees are liable to Dutch tax for the duration of their contract. And because of this, the legal employer is legally obligated to create a complex payroll administration and ensure proper payment of Dutch payroll tax. The consequences can be severe if these issues are not addressed properly; your clients in the Netherlands may be subject to fines and legal repercussions. Fortunately, Dutch Umbrella Company has the expertise to minimise these risks and ensure your activities in the Netherlands run smoothly.

Properly addressing Dutch payroll tax

If you are active in the Dutch market, Dutch law specifies that your entire payroll must meet Dutch standards. This means your employees must be registered with the Dutch payroll tax office, monthly costs must be administrated correctly and wage tax and social premiums must be withheld and paid. Additionally, there are certain loopholes in Dutch payroll tax legislation which can prove beneficial to your financial position. By working with Dutch Umbrella Company, you will enjoy all the benefits a professional payroll service provider can offer while at the same time ensuring perfect compliance with Dutch payroll tax law. Please feel free to contact us for more information about our services.