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Thread poster: kjmcguire
Freelancing in the Netherlands
kjmcguire
Netherlands
Local time: 11:43
Chinese to English
Jul 1, 2008

Hello everyone,

I was wondering if someone knew what the tax rules for working as a freelance translator in the Netherlands are, particularly for a person who wants to do part-time freelance translator alongside a regular 'day job' (I currently work 40 hours per week).

Do I need to apply for a VAT number? I don't plan to launch into a full-time career in translation just yet, though that is a possible career move in future. For the moment, I'm just interested in gaining professional experience and supplementing my existing income with the odd translation assignment.

I'm also interested in knowing how I would need to report any income made from freelance translation when I fill out the annual PAYE forms. I started working in the Netherlands less than a year ago so I'm afraid there's still a lot I don't know about the Dutch tax system. All I know is that the government is very interested in keeping 40% of my hard-earned salary.

Any advice or information you may have would be very much appreciated.


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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 11:43
English to Dutch
+ ...
Dutch tax rules Jul 1, 2008

Yes, I think you need a VAT number, and you need to register with the "Kamer van Koophandel" (Chamber of Commerce) too, IIRC.
Whether you actually have to charge VAT, is uncertain. It depends on your tax inspection region. Some tax inspectors will rule that you should apply VAT, others that translation is a creative activity which as such does not require VAT.

On your tax form, you will have to fill this in as 'Overige inkomsten' (other income), unless you really set yourself up as a company (this is called ZZP - 'Zelfstandige Zonder Personeel' - Independant Without Employees), in which case you will have to make a complete year account, and you fill in your income as 'Winst uit bedrijf' (Profit from company). This has several advantages and disadvantages.


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kjmcguire
Netherlands
Local time: 11:43
Chinese to English
TOPIC STARTER
Bedankt voor de informatie Jul 2, 2008

Thanks Jan. I think that has answered most of my questions. Once I am registered with the Kamer van Koophandel, do I need to apply elsewhere for the VAT number?

I know a few people who have set up their own companies and/or have worked as freelancers so I will also ask their advice. One of my acquaintances has confirmed that all freelancers need a VAT number, regardless of whether they actually apply VAT charges.


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Tuliparola  Identity Verified
Germany
Local time: 11:43
Member (2003)
Dutch to German
Kamer van Koophandel - why that? Jul 2, 2008


Jan Willem van Dormolen wrote:
you need to register with the "Kamer van Koophandel" (Chamber of Commerce) too, IIRC.
After all I have heard, even from a tax accountant who is specialized in advising freelancing translators, it is not necessary for freelancers and doesn't make sense either, cause freelancers are not the target group of the KvK.

Jan Willem van Dormolen wrote:
Some tax inspectors will rule that you should apply VAT, others that translation is a creative activity which as such does not require VAT.
?? There are some exceptions but to my knowledge only regarding to literary translations.

Regards
Steffi


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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 11:43
English to Dutch
+ ...
Answers Jul 3, 2008

Kamer van Koophandel: some say it's necessary (I was told so by the tax office when I started business 11 years ago), some say it's not. It's true that KvK never did seem to do anything that was of any use to me.
VAT: I once had a conversation with two colleagues. We were spread over the country, thus we were in three different tax districts. According to my inspector, I had to apply VAT to all translations. According to the inspector of my first colleague, he never had to apply VAT for any translations. According to the inspector of the last of us, he had to apply VAT to technical, but not to literary translations. Go figure. Whence my advice: go to your local tax office and ask.


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Carola Stone
Local time: 11:43
English to German
+ ...
KvK entry not required for VAT no. Jul 7, 2008

Hi Kelly,

I found myself in a similar position to yourself 2 years ago. Welcome to the club of veteran buitenlanders)). You get the medal after approximately 12 months or when you have successfully filled in your first tax form, whichever is first. joke.

The KvK entry is not strictly necessary (at least the last time I checked in 2007). KvK Zuid Limburg is thinking about making it manadatory, however, we are currently still classed as a so-called free profession, together with artists etc. I joined anyway. see below why.

Your BTW (i.e. VAT) nummer you can get from the Belastingdienst.nl if you set up a freelance business. Setting up a zzp business does not necessarily mean to be classed as an "onderneemer". Only if you can prove that you spend 1225 hours a year occupied with your business (chargeable as well as unchargeable hours - at which point some become rather creative)) , you can class yourself as such and then use various tax benefits (starters aftrek etc...) Given your current working hours, however, no tax inspector will believe you that one. They do make home visits at times to check if things are kosher on that front, looking into computer files how often and how long you worked on them, demanding administration, agendas etc to be kept and so forth. (So we were told anyway by the KvK. )

When you get to an onderneemer level, consult a tax expert at least for the first year to show you the ropes. You can for example claim back business expenses for things you bought up to 5 years before you set up business. Things like Laptops which you bring into your business.

How good is your Dutch by now)??, A reasonable command of the language is absolutely necessary to make any sense out of the Belastingdienst webpage. The English version is pretty restricted. The fun starts when you have to call them because something went wrong ....

Be warned: One trip wire they have ready for you at the Belastingdienst: Never klick the box for Intercommunitaire Leveringen if you have foreign customers (in my case Germany). You do NOT deliver any goods. The VAT form "Aangifte Omzetbelasting" is a little misleading on this point. Despite the fact that you deliver into Germany/China wherever, you have to enter them under Section 1 which has the header "Leveringen en/of diensten binnenland" which confuses (at least I found) Anything you do for foreign customers you have to enter under point 1e "Leveringen/diensten belast met 0% of niet bij u belast'.

Section 3 "Leveringen naar het buitenland' only refers to goods, but they do not say that.
And once you are in the system as such, they keep raising "ICL opgaaven" although you never have made any Intercommunitaire Leveringen in the first place, but entered your sales in the wrong box. You can rectify this by filling in an "Suppletie" form which has to be posted to them. This however takes time to register. Non-completion of the ICL form (how can you?) then results in a fine to the value of 113 Euros. What follows is a merry go round on the phone, a written letter explaining the whole thing again, asking them to withdraw the fine, which to be fair they did. They still raise the ICL's for me, but no fines because I enter the proceedings in box 1e now.

VAT: I do not declare VAT/BTW on my invoices outside NL, or rather I do with 0%, however, I do for Dutch clients (19%). You have to pay what you charged there back to the tax man usually on a quarterly level following your online "aangifte omzetbelasting" which is done online and pretty straight forward once you know which boxes to avoid, see above. (The veteran medal remains sadly to be an outstanding item though, but I am patient)

re: KvK: I found their various seminars for beginning freelancers fairly effective in order to not only gain some knowledge on how to set up, but also to get to grips with some of the Dutch business/tax terminology. Crash course Dutch business lingo so to say.
A KvK membership can also be of use if you want to check out potential customers or if you have a general question in connection with running your business etc. Certainly if you are new to the country and personal backup with business expertise is limited.
You also get listed in their business directory. (But do not expect customers to kick in your door because of that. You are sharing the turf with fully fledged, full time + overtime professionals of many years with diplomas, accreditations, association memberships and CAT libraries the size of planets thrown into the bargain.

Hope to have been of some help! Have fun finding your way.


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Marion Rooijmans
Netherlands
Local time: 11:43
English to Dutch
+ ...
Confusing Jul 8, 2008


Carola Stone wrote:


Be warned: One trip wire they have ready for you at the Belastingdienst: Never klick the box for Intercommunitaire Leveringen if you have foreign customers (in my case Germany). You do NOT deliver any goods.


I declare all translations to foreign customers as Intercommunautaire leveringen. Never had any problem with that...


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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 11:43
English to Dutch
+ ...
Lucky you... Jul 8, 2008


Marion Rooijmans wrote:


Carola Stone wrote:


Be warned: One trip wire they have ready for you at the Belastingdienst: Never klick the box for Intercommunitaire Leveringen if you have foreign customers (in my case Germany). You do NOT deliver any goods.


I declare all translations to foreign customers as Intercommunautaire leveringen. Never had any problem with that...


You've been lucky then, until you get an audit. Because translations are NOT 'leveringen', as they are not goods, but services. You better contact you local tax office and talk with them about this. I don't want to scare you, but this might get you into some trouble.


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Marion Rooijmans
Netherlands
Local time: 11:43
English to Dutch
+ ...
Frustrating and confusing Jul 10, 2008

I just called the Belastingdienst. They told me that translations for foreign clients should not be filled in on your 'Aangifte omzetbelasting' at all! And accordig to their website, box 1e is intended only for goods and services taxed in the Netherlands, not for goods that are taxed in another country or services in another country.

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kjmcguire
Netherlands
Local time: 11:43
Chinese to English
TOPIC STARTER
Lots of info to digest... Jul 13, 2008

Thanks for all the useful information, especially Carola. I'll be investigating the tax rules and VAT issue a little further as it seems that the rules vary from province to province. To be honest, my knowledge of taxation and freelance business is lacking so I might even see if I can find someone who can advise me and make it all a little clearer.

I'm considering sending my CV to a few local translation agencies so I would like to know whether I will need a VAT number if I will just be working on outsourced assignments from Netherlands-based agencies. As I mentioned before, I am only interested in taking on translation work during my evenings and weekends (as a source of additional income) so I don't really anticipate a huge workload or income. Am I correct in assuming that any earnings should be reported in the yearly taxes as 'Overige inkomsten'?

I know that staff positions at translation agencies are few and far between so I'd imagine I'd have more luck taking on the occasional outsourced assignment. Have any of you worked as freelancers for translation agencies? Did you need to apply for a VAT number before sending in your CVs? Would agencies take on freelancers who have a 'day job'?

Sorry for asking so many questions but I like to do things properly and prefer to ask a hundred questions than make a costly error.


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Joanna Kulig  Identity Verified

Local time: 11:43
English to Polish
any changes? Feb 6, 2012


Marion Rooijmans wrote:

I just called the Belastingdienst. They told me that translations for foreign clients should not be filled in on your 'Aangifte omzetbelasting' at all! And accordig to their website, box 1e is intended only for goods and services taxed in the Netherlands, not for goods that are taxed in another country or services in another country.



Hi all,

I see the topic has been covered with dust... I hope you won't mind if I refresh it a little bit.

I started a freelancing business in the NL last October (2011). Do the rules you mentioned above still apply? I was told a little bit at the Belastingdienst, they even sent me an email with more explanation, but when I wanted to learn about the taxes etc. in more detail, they unfortunately failed to help me... I was told that I should charge VAT to the Dutch clients. Does it apply to the EU clients too? I know I don't have to charge American Clients with VAT.

And also, does anybody know if I'm eligible for the "kinderopvangtoeslag" as a freelancer? How would it work? Would I be allowed to put my child there for only the time when I work? I was told that I cannot receive the benefit, but a friend of mine receives it, being a zzp'er too. Well, he works full time, so maybe these are two different things. Nevertheless, it would be so nice if I could put my child in a daycare centre and work without so much stress... Just to explain - If I am not eligible, I won't be able to pay for the daycare, the prices they set are ridiculously sky high!

And maybe someone would like to share the secret of tax-deductible expenses? What can I deduct? I work at home... (This is one of the questions that have not been answered by the tax office -> 'oh, these are such details!'. Yes, and I would like to know them...)

Thank you for reading. Groetjes to all!


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Olly Pekelharing  Identity Verified
Local time: 11:43
Member (2009)
Dutch to English
Intercommunautaire leveringen Feb 6, 2012

Hi Joanna,

This is the way of things as far as I understand it:

As of 2010, 'Intercommunautaire leveringen' also applies to services and thus also translations. So if you work for customers in the EU (except for NL of course) you will not charge VAT but you will need to report the provision of the service to the tax people by means of an 'opgave intercommunautaire leveringen' (and you write something to the effect of "VAT reverse charge procedure in
accordance with Directive 77/388/EEC" on your invoice).

You can get kinderopvangtoeslag but you must be ready to hand over some kind of proof (invoices?) that you worked the hours your child was in daycare.

Tax deduction can be a bit of a grey area. Anything you purchase that is clearly for your translating business (computer, dictionaries, etc.) is tax deductible. However there are also ambiguous items, like your telephone and internet connection. Chance is you use them both for business and private use, so officially you are supposed to calculate (roughly) which potion of the bill is for home use and which for business.


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Samuel Murray  Identity Verified
Netherlands
Local time: 11:43
Member (2006)
English to Afrikaans
+ ...
@Carola Feb 6, 2012


Carola Stone wrote:
The KvK entry is not strictly necessary (at least the last time I checked in 2007). KvK Zuid Limburg is thinking about making it manadatory, however, we are currently still classed as a so-called free profession, together with artists etc.


I've never heard of the category "free professions". Do you have a URL for that?

I'm not sure whether joining the KvK is mandatory but it costs very little (EUR 50.00 per year) and they arrange the VAT number for you and your KvK entry gives you a bit of credibility (since anyone can access it via the internet), plus they arrange seminars on various business issues that is useful to attend (e.g. they have one on tax, for startup businesses).


Your BTW (i.e. VAT) nummer you can get from the Belastingdienst.nl if you set up a freelance business. Setting up a zzp business does not necessarily mean to be classed as an "ondernemer". Only if you can prove that you spend 1225 hours a year occupied with your business, you can class yourself as such and then use various tax benefits.


Yes. What is important is that you don't use the word "freelancer", because the Dutch tax department has its own definition of the word "freelancer" that does not apply to most freelance translators. What you are is a ZZP'er (and although this is not a legal term either, it will not be misunderstood by the tax man if you use it).

As far as I know, you have to charge VAT even if you do translation just as a hobby (if you get paid for the translations in any way). Not only businesses need a VAT number, but only businesses can deduct business expenses from tax. I'm not sure if non-businesses can claim VAT back.

I'm not sure if you can deduct business expenses if your translation business is not your main source of income. Theoretically, you can make the 1225 hour requirement even if you have a job, if you can work 5 hours a day for 5 days a week on your business (and prove it, using a meticulously kept diary detailling what you did each hour).


They do make home visits at times to check if things are kosher on that front, looking into computer files how often and how long you worked on them, demanding administration, agendas etc to be kept and so forth. (So we were told anyway by the KvK. )


The tax people from my local KvK branch said that they *can* do that if they need to determine if you're lying, but my local tax people also said that if you keep meticulous records of every hour spent, you would normally have no problem convincing the tax man unless there is evidence to the contrary.


You can for example claim back business expenses for things you bought up to 5 years before you set up business.


Also if you bought it outside the Netherlands or outside Europe?


Be warned: One trip wire they have ready for you at the Belastingdienst: Never klick the box for Intercommunitaire Leveringen if you have foreign customers (in my case Germany). You do NOT deliver any goods. The VAT form "Aangifte Omzetbelasting" is a little misleading on this point. Despite the fact that you deliver into Germany/China wherever, you have to enter them under Section 1 which has the header "Leveringen en/of diensten binnenland" which confuses (at least I found) Anything you do for foreign customers you have to enter under point 1e "Leveringen/diensten belast met 0% of niet bij u belast'.


This does not seem right.

"Binnenland" means inside the Netherlands. If you had clients inside the Netherlands, then you have to charge VAT on their invoices, and those VAT amounts go into this box on this screen. But if you had clients elsewhere in the EU (i.e. buitenland), you don't add VAT to their invoices but simply write "VAT shifted", and you need to declare "intracommunautaire prestaties" (ICP).

What is true, however, is that if you had clients outside the EU, then the income for those clients should not be declared for VAT at all (not even at 0%). When you file your VAT returns, any income you received from outside the EU (from business clients) is simply not mentioned at all. My first tax consultant made that mistake and declared to the tax people that I had all that income at a 0% VAT rate, which then triggered an audit (for which I'm actually grateful).


They still raise the ICL's for me, but no fines because I enter the proceedings in box 1e now.


I never fill in box 1e. I fill in box 1a with my NL clients, and box 3b with my EU clients, and none of the boxes with my US clients.

I must confess I'm still not sure where I'm supposed to fill in non-business clients from outside the EU -- should it be under "3a Leveringen naar landen buiten de EU (uitvoer)" or should I add it to my NL accounts under 1a Leveringen/diensten belast met 19%? I just try not to get such clients...


VAT: I do not declare VAT/BTW on my invoices outside NL, or rather I do with 0%, however, I do for Dutch clients (19%).


No, this is not correct, as far as I know. For EU clients, you should not charge "0% VAT" but instead write "VAT shifted" on the invoice. For non-EU clients, you should not charge "0% VAT" either, but instead write "No VAT applicable" on the invoice. Please, correct me if I'm wrong.


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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 11:43
English to Dutch
+ ...
Some more remarks Feb 6, 2012


Samuel Murray wrote:


Carola Stone wrote:
The KvK entry is not strictly necessary (at least the last time I checked in 2007). KvK Zuid Limburg is thinking about making it manadatory, however, we are currently still classed as a so-called free profession, together with artists etc.


I've never heard of the category "free professions". Do you have a URL for that?


The Dutch expression is 'vrije beroepen'. However, AFAIK this is not important for tax purposes.




Your BTW (i.e. VAT) nummer you can get from the Belastingdienst.nl if you set up a freelance business. Setting up a zzp business does not necessarily mean to be classed as an "ondernemer". Only if you can prove that you spend 1225 hours a year occupied with your business, you can class yourself as such and then use various tax benefits.


Yes. What is important is that you don't use the word "freelancer", because the Dutch tax department has its own definition of the word "freelancer" that does not apply to most freelance translators. What you are is a ZZP'er (and although this is not a legal term either, it will not be misunderstood by the tax man if you use it).


AFAIK, the 1225 hour rule applies to the so-called 'Zelfstandigenaftrek'. This is a deduction from your tax income that you can apply when you spend more than 1225 hours per year on your business.

[quote]
As far as I know, you have to charge VAT even if you do translation just as a hobby (if you get paid for the translations in any way). Not only businesses need a VAT number, but only businesses can deduct business expenses from tax. I'm not sure if non-businesses can claim VAT back.
[\quote]

No they can't. The whole purpose/system of VAT is that it is paid by the end-customer. If you're not a business, you're an end customer and whence have to pay the VAT.

[quote]
I'm not sure if you can deduct business expenses if your translation business is not your main source of income.
[\quote]

I'm pretty sure you can, but do inquire with your local tax office. If they don't give you a definite answer on the phone or in person, then write them a letter requesting a decision. They MUST answer in written, and what they write, will stand. (Unless you succesfully appeal against it, but that's another matter.)

[quote]


You can for example claim back business expenses for things you bought up to 5 years before you set up business.


Also if you bought it outside the Netherlands or outside Europe?
[\quote]

AFAIK, yes.

[quote]


Be warned: One trip wire they have ready for you at the Belastingdienst: Never klick the box for Intercommunitaire Leveringen if you have foreign customers (in my case Germany). You do NOT deliver any goods. The VAT form "Aangifte Omzetbelasting" is a little misleading on this point. Despite the fact that you deliver into Germany/China wherever, you have to enter them under Section 1 which has the header "Leveringen en/of diensten binnenland" which confuses (at least I found) Anything you do for foreign customers you have to enter under point 1e "Leveringen/diensten belast met 0% of niet bij u belast'.


This does not seem right.
[\quote]

Indeed it isn't. This used to be the case, but this was changed a few years ago. Nowadays, also services to EU clients must be declared as Intercommunautaire leveringen.


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xxxVert-ical Tr
Netherlands
Local time: 11:43
Dutch to English
+ ...
Helpful link Feb 6, 2012

http://ec.europa.eu/taxation_customs/vies/

When I was struggling with this same issue in 2010, I was referred to this site by my local tax authority. It was a helpful starting point in understanding the new Dutch requirement for reporting all dealings with EU clients, which came into effect in 2010. The FAQ section of this website was especially helpful in understanding the purpose of this new law. Based on my experience with bookkeepers not entirely familiar with the requirement for reporting the export of services, including hourly price quotes from some needing to do some 'research' into the situation, I now use an online bookkeeping system with built-in ICP functionality and am easily able to meet the criteria in place in the Netherlands. After having spent many hours on this issue in that year, I find this solution to be the best one for me as a freelancer. I'm not sure what the current situation is but in 2010, this requirement was not even in place in all EU countries making it even more difficult to figure out. The information available on this topic in the Netherlands has fortunately greatly improved since then.


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