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j-willems
Member

Exchanging tips on how to file taxes Dutch - Netherlands

Hey guys,

I've been working through Upwork for a while now, currently working for two companies on long-term contracts. Although having read almost every page about taxes (belasting) in Dutch, I'm still very confused....as I went through the forum, I saw I wasn't the only one in a confused state about VAT. 

I was wondering if there was someone who could help me out what to do in order to properly file taxes as a Dutch freelancer. So far I read that I should bill my clients - almost like a 'fake bill' - on which I would write the 21% VAT that we are obliged to pay as Dutch freelancers. This bill should include both of our VAT numbers. 

So say, my client pays me $20/h , I should charge him around $16/h and mark the $4/h as VAT. 

So here my questions... 
A. Am I going the right way with these thoughts?
B. Does this work the same with non EU-countries

C. Is there anything my clients have to do, besides accepting the bills I send them?

 

Thank you!

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shetani
Member

Hey Judith,

 

I consulted with a tax advisor and they couldn't grasp the concept of Upwork - they figured Upwork operates in the same way as freelancing agencies in the Netherlands.

 

Did a bunch of research on my own though, so here's how I'm doing it at the moment:

 

1. For each Upwork's invoice, I create an invoice for my own bookkeeping (regardless of the client being in EU or not) and attach Upwork's invoice to it

2. My invoice contains my full details + VAT ID and the client's full address

3. If the client is in EU and has a VAT ID, I add their ID to the invoice, "charge" 0% VAT and add a note at the bottom that VAT is reverse-charged to the client

4. If the client is in EU and doesn't have (or doesn't provide) a VAT ID, I -should- charge 21% VAT (just like in the example you mentioned) -- but see note #2 below

(5. If the client is in NL, charge 21% VAT regardless of having VAT ID)

 

Quarterly VAT reports:

 

1. For EU clients/invoices which you have VAT IDs for, you'll need to file an additional form (Opgaaf intracommunautaire prestaties)

2. For EU clients who didn't provide or don't have VAT IDs, I file through MOSS (Btw betalen via 1 lidstaat van de EU) -- I've only done this once or twice and I had to pay the tax amounts of the countries I was filing taxes for. So e.g. for a client from Portugal, I had to pay 23% if I recall correctly. Not 21%. I may have messed that up though.

 

Hope this helps!

 

Cheers

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28 REPLIES 28
e_skoldebring
Member

The only one you should trust on how to file dutch taxes is a dutch tax advisor. I rekommend you book a meeting with one as soon as possible.

 

 

Thank you Erik. I will consult a tax advisor as soon as I'm in the Netherlands again....but as just a simple starter with a basic income living in Asia, I thought it wouldn't be too bad to share tips on here. It seems more people are struggling with these questions and I think creating an invoice with VAT on Upwork is more or less the same for all Dutch freelancers. Since Upwork is a different system then say 'regular clients', I struggle adding VAT to the billings. It seems to be a reverse process. 

However, consulting an advisor will give me definite answers and clearity, so I appreciate your response!


@Judith W wrote:

Thank you Erik. I will consult a tax advisor as soon as I'm in the Netherlands again....but as just a simple starter with a basic income living in Asia, I thought it wouldn't be too bad to share tips on here.


 If you are iving in Asia, should you not consult a tax advisor in the country you are living in?

 

Hey,  I have a non-resident taxpayer status. It means that, as I'm working for Dutch companies, I have to file for taxes in the Netherlands.


@Judith W wrote:

Hey,  I have a non-resident taxpayer status. It means that, as I'm working for Dutch companies, I have to file for taxes in the Netherlands.


 🙂 minefield! 🙂

 

shetani
Member

Hey Judith,

 

I consulted with a tax advisor and they couldn't grasp the concept of Upwork - they figured Upwork operates in the same way as freelancing agencies in the Netherlands.

 

Did a bunch of research on my own though, so here's how I'm doing it at the moment:

 

1. For each Upwork's invoice, I create an invoice for my own bookkeeping (regardless of the client being in EU or not) and attach Upwork's invoice to it

2. My invoice contains my full details + VAT ID and the client's full address

3. If the client is in EU and has a VAT ID, I add their ID to the invoice, "charge" 0% VAT and add a note at the bottom that VAT is reverse-charged to the client

4. If the client is in EU and doesn't have (or doesn't provide) a VAT ID, I -should- charge 21% VAT (just like in the example you mentioned) -- but see note #2 below

(5. If the client is in NL, charge 21% VAT regardless of having VAT ID)

 

Quarterly VAT reports:

 

1. For EU clients/invoices which you have VAT IDs for, you'll need to file an additional form (Opgaaf intracommunautaire prestaties)

2. For EU clients who didn't provide or don't have VAT IDs, I file through MOSS (Btw betalen via 1 lidstaat van de EU) -- I've only done this once or twice and I had to pay the tax amounts of the countries I was filing taxes for. So e.g. for a client from Portugal, I had to pay 23% if I recall correctly. Not 21%. I may have messed that up though.

 

Hope this helps!

 

Cheers

Thank you so much Ines! This is super helpful. I knew there was a lot more to it then simply providing the Tax Service with the invoices from Upwork. A lot of administration that we have to do ourselves.. So I guess I really have some research to do!

 

Thanks!!

Judith,

 

Could you implement the VAT solution suggested by Ines?

 

Do you have any further advice? Thank you. 

Hey Carolina! 

I´ve used the exact method as described by Ines. So for each invoice that has been created by Upwork, I create my own ´Dutch´ invoice.  The invoices by Upwork contain quite a few details these days, which makes it a bit easier.

What I add to the NL invoice are an invoice nr. for my own administration and the exchange rate of the day the invoice was created (I do this so that I have a global overview of the amount of euro's I've earned). 

 

I know this is even a heard concept to grasp for tax advisors, so when you do it as described by Ines, you'll be fine!

 

Let me know if there's anything else I can help you with. I know it gave me some stress to figure this out, so I'd be happy to help.

Best,
Judith

Thanks for your reply Heart

I'm now filling my fist dutch quartely tax declaration and my main questions are: 
- how do you calculate the amount of € when all the invoices are paid in $;

- Where do I actually fill the services for the US, because I can only find a column for deliveries, but maybe I'm seeing it wrong;

- About the tax that the upwork charges me, and that states VAT reverse charge do I have to do anything about it?

any help would be wonderful!

Thanks in advance

 

Hi Judith,
I am new at Upwork, and I’m an expat in Rotterdam. I am reading all the comments which are super useful, but I still have some questions and thought/hoped you could help ...
- is it necessary to be registered in KVK - as a freelancer if your clients are from outside NL
- did you do your taxes yourself or how did you manage? (I’ve worked for an employer always, so the annual tax declaration has beenpretty straight forward for me..is always already filled in in the system, so I’m also quite new to it)
- any advice on how to start or where to start? Which paper work? First KVK? Then? Should I contact an accountant? Should I get a bookkeeping system for myself?

Thanks a lot and hope you can help, it’s very appreciated!

Carla

Hey Carla, 

I can understand that as an expat in the Netherlands, all 'our rules and regulations' regarding VAT and income taxes etc. are very complicated (I am still terribly confused haha).

 

While I'm not 100% familiar with how it works for expats, there are a few different options. I think the main question is, if you're filing your taxes in Holland or in another country? Because you'd want to prevent double taxation :).

I think registration with the KVK is either useful if you (permanently) live in Holland and already pay taxes here, or if you live outside the NL and mainly work with clients from Holland. It's also important to look at how much of your yearly income comes from your freelance work. If it's a few thousand euro's, you could just write it down in a seperate box, whilst filing your yearly tax return. You'll then have to pay only the income tax and not the VAT.

You could always ask the KVK, as they can always give you some advice on the spot whether or not it'd be useful to officially register. 

 

I've always done everything myself, including bookkeeping...albeit I've had a lot of help figuring everything out in the beginning. Now I just make seperate invoices for all of my Upwork invoices, so that I have an overview of the corresponding VAT, the amount of USD in Euro's, all the invoicesnr's etc... It can be a bit tricky figuring everything out, but once you've done it it's easy to keep track of. 

You can always send me a private message so I can help you with further questions!
Judith

Hi Ines, thanks for sharing your solution!

 

I would like to know if you are still handling VAT this way and how do you proceed with clients outside EU. 

 

Thanks lots Robot Happy

Hey Carolina,

 

First off - I was using Visma eAccounting while I was in NL, it made it a lot easier for me to manage my finances, all the VAT rules and reporting. And I hired a great bookkeeper to just take all that stuff off my plate. Here's the latest process:

 

For every Upwork invoice, create your own invoice. Invoice is for the full amount charged to the client (don't deduct Upwork's fees from it).

 

Invoicing depending on country and VAT ID:

 

A. Client in EU, no VAT ID: calculate 21% VAT from what you charged the client. If you charged/earned $200, your invoice should say "Subtotal: $165.29, VAT (21%): $34.71, Total: $200.00"

B. Client in EU, has VAT ID: VAT 0% and add a note at the bottom of your invoice that the client is subject to reverse-charge. I had this in my invoices: "No VAT liability in Seller’s Country. Customer to Reverse Charge. Art. 44 & 196 EC Dir. 2006/112"

C. Client outside EU: don't include "VAT" on the invoice at all, just make sure you have the client's address on the invoice. Invoice for the full amount (i.e. if you earned $200, subtotal/total is $200)

 

VAT Reporting:

1a Leveringen/Diensten belast met hoog tarief

Left box: sum of amounts from (A), not including VAT.
Right box: sum of VAT amounts from (A)

 

3a Leveringen naar landen buiten de EU

Total amount from (C)

 

3b Leveringen naar of diensten binnen de EU

Total amount from (B)

 

Upwork's fees go in 4a Leveringen/diensten uit landen buiten de EU. Fees in the left box, VAT on Upwork fees in the right box (21% of what's in the left box).

 

If you worked for EU companies (if your amount in 3b is not 0) then you also separately need to file intra-communitary ... something form (Opgaaf ICP). In this form, you're only reporting the amounts from (B) per client/VAT ID. The total amount you file in this form should equal 3b from the VAT report.

 

Hope this helps!

Hi Ines,

 

First off you are a God send! Thank you for all your help it has been very useful so far. I was wondering though if you could help me further. I am an expat who moved to Rotterdam last year and I am a resident here. I do not have a single Dutch client as I do not speak the language (maar, Ik leer!) so it is not my market. My question is do I still need to pay Taxes on anything. 


Covid inspired me to look into freelancing again as I always held office jobs before, which meant I never really had to deal with the taxes myself, and having just moved ti the Netherlands its all a bit confusing. I've already registered my freelancing business at the KVK but now I'm not sure i needed to do that since i don't have a client from here.

Let me know your thoughts and thank you in advance!

Hi Rex,
I am in exactly the same situation as you, but I haven’t registered myself as a freelancer in the KVK yet, and if I don’t have to I would prefer not to do it, at least for now, if it is not necessary when working with clients outside NL. My question is, if I can still work with Upwork without being registered? And if so, do you know what would the process be when doing taxes?
Thanks in advance for the help, it’s very appreciated!
Carla

Hi Carla,

 

Did you find your answer already?

Thank you so much.

First time filing my quartely VAT and I followed your steps.

 

Mistakes I made (just found out, will have to try and correct them next quarter I guess):

- I worked for a client in the Netherlands via upwork. Initially I put them at B. But you cannot file an ICP for that since they are in the same country so you would have to put them in A probably. 

- I used google and the websites to discover the addresses of clients. For some I also found the VAT number there. One client in Estionia appears to have a VAT number elsewhere since I got the error that the VAT number was not correct when doing the ICP.

 

ICP is overall an unpleasant addition. I will not use Upwork anymore and try to invoice outside of Upwork since this is just an administratory mess already.

Hi Lucas,

 

How did you include the 21% VAT for your NL client? Did you deduct it from your fee? 

 

THanks for the help!

Hi Ines, I was hoping you would be able to help me on this. I am currently in the Netherlands with my husband, having received my visa through the spouse reunification scheme. I have been working on Upwork since the beginning of this year with clients outside of the EU, hence we haven't had any issues with VAT and taxes so far. 

 

My question then is this: I noticed that you said for every Upwork invoice I receive, I must then create a separate invoice for the full amount charged to the client. Unfortunately, I don't have a company registered in the Netherlands because I am only here on a spouse visa and I don't think I'm allowed to have a company, so I technically can't have an invoice.

 

Do you know if I still have to file for VATs like you've mentioned and how I could go about this? Thanks!

Hi Ines,

First of all you explained clearly, I only need to validate something

 

you said "For every Upwork invoice, create your own invoice. Invoice is for the full amount charged to the client (don't deduct Upwork's fees from it)." 

Why don't we deduct the fee on the invoice? and also when i enter the amount on Belastingdiest, am I gonna put the same amount as the total amount of the invoice? for instance, if the contract is 200USD after i create the invoice and put 200USD, should i add 200USD(167euro) in tax return form?

 

many thanks

Wow guys, I'm sorry for missing your messages - it's been a good minute or so since I've been on Upwork and even longer since I was last in the Netherlands, and I didn't have notifications on for this forum. I hope these answers will still help some of you though. 

 


Rex P wrote:

I am an expat who moved to Rotterdam last year and I am a resident here. I do not have a single Dutch client as I do not speak the language (maar, Ik leer!) so it is not my market. My question is do I still need to pay Taxes on anything. 


Rex - if you're a resident and spend more than 180 days in a year in the Netherlands, you're a tax resident and you need to pay taxes to the Dutch IRS. This has nothing to do with your clients' location - taxes are your obligation in the country in which you reside. You did the right thing by registering at KvK, and all of the stuff I wrote in my reply to Carolina applies to you as well.

 


Carla N wrote:
I haven’t registered myself as a freelancer in the KVK yet, and if I don’t have to I would prefer not to do it, at least for now, if it is not necessary when working with clients outside NL. My question is, if I can still work with Upwork without being registered?

Same as above, Carla. Registering at KvK is really simple - it costs €50, you book an appointment online and fill out a form when you get there, and it's all done in like an hour tops.

 


Lucas B wrote:

- I worked for a client in the Netherlands via upwork. Initially I put them at B. But you cannot file an ICP for that since they are in the same country so you would have to put them in A probably. 

- I used google and the websites to discover the addresses of clients. For some I also found the VAT number there. One client in Estionia appears to have a VAT number elsewhere since I got the error that the VAT number was not correct when doing the ICP.

 

ICP is overall an unpleasant addition. I will not use Upwork anymore and try to invoice outside of Upwork since this is just an administratory mess already.


Honestly Lucas, I wouldn't worry too much Smiley Frustrated I made some mistakes too - during my entire first year of freelancing from NL, I was submitting revisions for every previous quarter. I've never been audited but if you do get an audit, as long as they see you paying *something* and filing your reports on time, they'll give you a break and give you time to fix things if anything needs fixing. (info from an inside source)

 


Sara C wrote:

How did you include the 21% VAT for your NL client? Did you deduct it from your fee? 

Sara - yes. It doesn't matter if the Dutch client has or doesn't have a VAT ID, you need to deduct 21% from the fee that was charged to the client and you'll need to pay that amount to the IRS. E.g. if you earned $100, your invoice to client should say subtotal: $82.64, VAT (21%): $17.36, total: $100.

Note that this ignores the fee you paid to Upwork, which is a business expense and doesn't go on the invoice.

 


Yunqan L wrote:

I am currently in the Netherlands with my husband, having received my visa through the spouse reunification scheme.


Yunqan - I wish I could help you but I'm entirely unqualified for questions on this topic. The Dutch IRS should have an English help line so you could try giving them a call and explaining your situation, but if you already read somewhere that you're not allowed to work while on this visa, honestly your best bet is to (fly under the radar and not earn too much money) not break the law and conditions of your visa of course.

 


Volkan A wrote:

you said "For every Upwork invoice, create your own invoice. Invoice is for the full amount charged to the client (don't deduct Upwork's fees from it)." 

Why don't we deduct the fee on the invoice? and also when i enter the amount on Belastingdiest, am I gonna put the same amount as the total amount of the invoice? for instance, if the contract is 200USD after i create the invoice and put 200USD, should i add 200USD(167euro) in tax return form?

*Technically* you could include the fee on the invoice, as if it were a payment processing fee or something like that - you would treat it as a business expense that you passed on to your client.

But I found that to be a more complicated way of doing my invoices, and it was easier for me to just copy Upwork's invoice to client into my own invoice template, and file their invoice for the fee as a separate business expense (not passed on to the client).

 

When it comes to paying taxes, it won't make a difference to your final tax amount either way.

 

Edited to add: on the tax form, sections for income and expenses are separate. Under income, you would put the total amount invoiced to client ($200/€167), and under expenses, you'd put the total amount of Upwork's fee.

 

----

 

Sorry if I missed anything. Final notes:

 

1. Registering for VAT (even if you don't work for clients within the EU) is generally a good thing. Most companies now charge VAT to Europeans so if you provide your VAT ID when e.g. subscribing to Xero or purchasing a laptop or something, you're literally paying 21% less.

 

2. As a small business/solo proprietorship (eenmanszaak) registered at KvK, you're eligible for A TON of deductions and these will all be automatically applied when you file your tax report online. I don't remember the exact number, but if you're earning less than some €30k/year, you'll pay €0-€50 in taxes.

 

3. I'm not a tax consultant and finances/bookkeeping/accounting are the bane of my existence. Take all my advice with a grain of salt and do your own due diligence - call the IRS, get in touch with Dutch tax consultants if you can afford it, hire bookkeepers.

 

4. I hired a bookkeeper here on Upwork and she's been a life-saver for me. If you guys want her contact info, message me and I'll send you a link to her profile. After all the crazy scenarios I put her through, she's now a pro in Dutch taxes.

 

5. Seeing as how no one answered any of these questions in the past year, I can only conclude I was the only fool who paid taxes in the Netherlands LOL

Hi Ines, 

 

Thank you for explaining so much. I am registered at KVK and registered with the KOR, which means I can earn up to EU 20.000 per year and not pay tax. Does that mean I also don't have to pay tax on clients that are based outside NL (EU and outside EU)?

 

And I did mention my VAT nr in my profile, is that correct?

 

Thank you so much in advance.


Lotte M wrote:

Hi Ines, 

 

Thank you for explaining so much. I am registered at KVK and registered with the KOR, which means I can earn up to EU 20.000 per year and not pay tax. Does that mean I also don't have to pay tax on clients that are based outside NL (EU and outside EU)?

 

And I did mention my VAT nr in my profile, is that correct?

 

Thank you so much in advance.


Hi Lotte - I don't know what KOR is, but generally we're talking about two different taxes here. Income tax and sales tax/VAT.

 

What you say about KOR probably applies to income tax - meaning, if you earn less than €20k in a year, you won't have to pay income tax. This is filed yearly and paid every year in advance.

 

Paying tax on clients depending on their location is referring to the sales tax / VAT. This is filed quarterly and is not related to the income tax that you do or don't pay. (But again, I don't know what KOR is so although I feel like you'd still have to file VAT regardless, best to do your own research here)

 

VAT applies both to your sales (invoices to clients) and expenses (invoices from other companies to you, e.g. Upwork's service fee invoice, app subscriptions, phone subscription, etc)

 

Sales:

If you're working with EU-based clients (NL included), you're supposed to charge them VAT and then pay/pass that amount to Belastingdienst.

 

If the client is also VAT-registered and you have their VAT ID, then Belastingdienst refunds this amount to you. (Technically in this case you don't actually send money anywhere or get a refund to your bank account - the two amounts just cancel each other out)

 

But, if you don't have the client's VAT ID (e.g. they're not VAT registered or you simply can't obtain their VAT ID), then you'll have to pay the charged VAT amount and you won't get it back from Belastingdienst.

 

Expenses:

If companies are charging you VAT, you can usually give them your VAT ID so they would apply reverse charge / 0% VAT to your invoices. (Literally the same thing you're doing to your clients, but this time you are the client)

 

NL companies will still charge you VAT 21% (just like you will still charge NL clients 21%), but then Belastingdienst will refund this to you when you file your quarterly VAT report. You have to include these amounts in the report.

 

And yes, adding your VAT ID to your Upwork tax settings is correct - your clients can use this to file their own quarterly reports, and for you it means you don't pay VAT on Upwork's service fees, connect purchases, membership etc.

juliencollin
Member

Hi Ines and Dutch Upwork Freelancers !

 

I just started freelancing this year - and am now working on my first VAT filing. I am still confused about one thing: Do I need to pay VAT on the Upwork Service Fee ? I currently have "VAT Reverse Charge" on the invoices.

 

All my clients are in the U.S. I saw Ines put in one of her earlier messages that we had to declare all income (including Upwork's Fee) in section 3a Leveringen naar landen buiten de EU and then Upwork's fees go in 4a Leveringen/diensten uit landen buiten de EU. Fees in the left box, VAT on Upwork fees in the right box (21% of what's in the left box).

 

But Ines just mentioned in her latest message above that "adding your VAT ID to your Upwork tax settings is correct - your clients can use this to file their own quarterly reports, and for you it means you don't pay VAT on Upwork's service fees, connect purchases, membership etc."

 

So now I am still confused! Can anyone help out ?

Hi Julien,

 

You don't pay in the sense that money leaves your bank account, but you do have to file/report it. When filling out the VAT report, you'll manually calculate what the fees should have been (e.g. €100), and this is the amount you technically owe. On the last page of the report, this amount is "returned" to you and you won't actually get a bill for it.

 

ETA: Just to clarify as I wasn't super clear - you calculate what the VAT on fees should have been, not what Upwork's fees are (you still pay those automatically from every invoice, the 5/10/20%).

 

Hi Ines!

 

Thank you for your reply ! Your first statement was really clear to me 😉

 

I am so glad this is finally solved - thank you so much !

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