News
In 1997 the Dutch tax authorities decreed that all foreign companies sending people to work on assignment in the Netherlands were deemed to have 'fictitious residence' in the Netherlands for tax purposes. This means that all employees on assignment in Holland are subject to Dutch income tax liability from day one of such an assignment. The foreign company is obligated to set up a payroll administration and must make sure that every month the right amount of wage tax and premiums for the social security are withheld and paid.
If the foreign company
doesn't do this the client for whom the employees are working in the Netherlands
can be hold liable for the wagetax debt. You can imagine what the consequences
can be.
The tax rates in the Netherlands (including national insurance) for 2005
1st bracket: over
the first € 16.893 taxable income 34,4% tax and premiums
2nd bracket: over the next € 13.464 taxable income 41,95% tax and
premiums
3rd bracket: over the next € 21.405 taxable income 42% tax (no premiums)
4th bracket: over de rest (everything above € 51.762) 52% tax (no
premiums)