I'm a consultant in The Netherlands and for this purpose I control my own BV. Similar to an LLC in the USA.
But I don't drive a taxi, I do computer stuff. If you want to legitimately be independent in NL you can. I have a few friends in the construction industy(plumbers, carpenters, electricians, etc) who are ZZP'ers.
There are a few options open to people who legitimately want to be independent in their work, and this has absolutely nothing to do with this ruling. Or about Uber.
Uber is lying when it says that 90% of Dutch Uber drivers want to remain independent. There have been protests of Uber drivers wanting exactly this kind of ruling from the courts. And two major political parties (Groenlinks and PvDA) have been fighting for this. Uber is full of shit and they know it.
Just to point out, that a BV and an LLC are very different, in that anyone can have an LLC in the USA but the tax reporting requirements and overhead for a BV in NL are quite high and don't make much sense to anyone with an income less then.. well, quite high, by most standards. I know a lot of freelance software engineers in the netherlands, but none have a BV.
I know a lot of freelance software engineers in the Netherlands and quite a few of them do.
BV starts to make sense from about 100K turnover because you gain some tax advantages, it also makes working for larger entities easier and it allows you to charge a higher rate and to be in an easier position to work with subcontractors. It all depends on what you want, there are plenty of ZZP'ers in software development on the low end, but most of the high end will be through BV's.
What are those tax advantages, assuming that you're talking about income and not business expenses/investments? Why would making a BV enable you to charge higher rates if you're still the only 'employee' in the BV and have the same insurances?
In Switzerland and Germany there's a difference between an AG (Aktiengesellschaft) and a GmbH (Gesellschaft mit beschränkter Haftung).
Both have more or less the same tax and structural advantage (like limited liability, a far easier time to get acknowledged by social security, etc)
The main difference is capital requirements and more formality for the AG. For example: The law requires yearly external audits for an AG, while that's not necessarily the case for a GmbH.
Does Holland also make such a difference, or is BV the only such corporate form?
Note: Differences listed apply for Switzerland. It could be different in Germany.
Nice overview(s) for Germany and most other countries with comparisons where appropriate.
Regarding the AG in Germany and required regular external auditing, in my university course where I learned about the charasteristics of the most common German legal entities [0], there was no such requirement listed or talked about, maybe that's only for Switzerland?
The GmbH on the other hand requires a minimum capital of 25.000€ and is expensive to form (from the course mentioned above >1.000€ in fees for notarizations etc.) which is one reason why the "UG (haftungsbeschränkt)" (essentially "baby's first GmbH") was established a while ago.
A UG only has to have a minimum of 1€ in starting capital but has to
> "enlarge its capital by at least 25% of its annual net profit (with some adjustments), until the general minimum of €25,000 is reached (at which point the company may change its name for the more prestigious GmbH)."
What is the difference between those freelance software engineers and the Uber drivers if they are freelancing for one company only?
As far as I know, and I am happy to be corrected by somebody more knowledgeable, the famous Dutch ZZP'ers are tolerated. There is in the Dutch Law not a clarification of their legal and tax position:
Both freelancing and ZZP don't have a legal definition. It's just a business. In these cases a business of one. Without being incorporated, so if you screw up, creditors can come after your personal bank account.
Correct. With a BV in the Netherlands, you get immediately the fiscal Calvinism of the Dutch tax office at play. Despite the fact that:
- You work for yourself so you get 100% of the risk
- You have no benefits
- If you are sick you get no pay, unless you make a very expensive work sickness/income insurance
the Dutch tax office, judges that they do not want you
to be in a "too advantageous fiscal position" ...( Not making this up...these are their own words) so, forces you to pay yourself a minimum yearly salary that is updated every year so they can tax you. It is currently at 47,000 EUR per year I believe...and is independently of you making money or not...
the reason they use this salary is for tax purposes. otherwise doing tax fraud would be easy with a BV. by simply not paying yourself a wage and living of the BV instead.
The BV has to pay taxes. And costs have to be business related. Since when living from your own work is considered fraud?
There is a fundamental principle here, and that is the tax office considering that, unlike a permanent employee who cannot be fired and has almost no liability, an entrepreneur, despite taking all the risk and having non of the benefits, is judged that it should be forced into the same tax position. Where is the upside then?
This coming from the same tax office, that has enabled some of the biggest tax dodgers in the planet:
"Netherlands earned €25 mil. from Google's tax avoidance"
"The Netherlands is still one of the world's main tax havens, coming in fourth place on Tax Justice Network's biennial ranking of tax havens. Only the British Virgin Islands, the Cayman Islands and Bermuda scored worse than the Netherlands when it came to tax avoidance."
But I don't drive a taxi, I do computer stuff. If you want to legitimately be independent in NL you can. I have a few friends in the construction industy(plumbers, carpenters, electricians, etc) who are ZZP'ers.
There are a few options open to people who legitimately want to be independent in their work, and this has absolutely nothing to do with this ruling. Or about Uber.
Uber is lying when it says that 90% of Dutch Uber drivers want to remain independent. There have been protests of Uber drivers wanting exactly this kind of ruling from the courts. And two major political parties (Groenlinks and PvDA) have been fighting for this. Uber is full of shit and they know it.
Here is a better article on the ruling. https://www.ad.nl/werk/rechter-uber-moet-chauffeurs-in-diens...