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I am a freelance journalist and I am working for this news agency in the Netherlands. I write for them irregularly, a couple of papers each month, and thus my annual salary thereby is about 3000 Euros. However, I am not living in Europe and I asked them to send my salary to my friend's bank account who lives there. So they send each month about 300 Euros to my friend's account. Once a while I travel to Europe and my friend gives me the money. My friend says there is about 20 percent tax. That means he should give me just 240 Euros. Is that true? That seems to me too much.

  • Do you not receive any sort of pay statement form the agency? – brhans Sep 26 '17 at 11:06
  • @brhans Yes, I do, I know how much they send to my friend's bank account. But my friend says there is tax after it is sent. – Sasan Sep 26 '17 at 12:01
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    hmmm - I think maybe your 'friend' is making his own 'tax'... – brhans Sep 26 '17 at 12:23
  • Does your friend live in The Netherlands? Just to approach this from another perspective, where I live if a company is transferring you money on the terms of "Remuneration" or "Pay" or "Payment for services" (you get the idea, talking about payment outside of your 9-to-5 here) then you are obliged/expected to pay some extent of Personal Income Tax on it (here it's 15% right now) - this could apply to The Netherlands as well; although, you are the one employed/contracted, so not sure if they are sending your friend a transfer of "Payment". – Gabor Sep 26 '17 at 14:42
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    As @Gabor pointed out, in general (I do not know Netherland law exactly,but the general principal would hold good) any payment by a party to any individual would be considered as 'income from other sources' for the individual. Any income of an individual will fall under personal income tax laws, income tax will have to be paid (according to applicable slab), 20% may be her slab (please check once), that would explain the 60 euro deduction. On a side note, your current arrangement may be looked at by tax authorities as quasi-legal/not legal, why not get the money in your account. – Ironluca Sep 27 '17 at 11:10
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Several things to consider:

  • I don't see why your friend should pay any tax. It's not his income at all. And I am not sure where your income should be taxed in this scenario. Is he declaring it as his income somehow? The bank won't do it for him, the transfer as such should be transparent. On the other hand, money transiting on his account could in principle look suspicious, although €300 is unlikely to raise alarm.

  • What I do know is that if you do pay taxes, 20% is not particularly high as such. There are four brackets of income tax (and tax-like contributions to the pension system) in the Netherlands, between 36.55% and 52%. Rates for personal taxes in the Netherlands are simply way higher than what you might be used to in Eastern Europe or what has been mentioned in comments.

  • In fact, if anything, 20% seems too low. I am at a loss guessing what it could correspond to, you could ask your friend how he came to that number.

  • There various tax discounts (kortingen) and deductions (aftreken) that apply to freelance work (and some that apply to all incomes). €3000 yearly is quite low and would probably not be taxed at all if you were recently registered as freelance (zzp'er) in the Netherlands and had no other sources of income. But on the other hand, if your money is treated as being part of your friend's income, these wouldn't apply, as he is probably already benefiting from them.

  • There are special rules for copyright fees. Not sure this is necessarily 100% kosher but I have met people who got paid that way for articles they wrote in trade publications.

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protected by Chris W. Rea Oct 17 '17 at 17:06

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