A split payroll or “salary split” is basically dividing one taxpayer’s taxable income between several countries. It usually relies on the application of international double taxation treaties entered into by most OECD countries.
The idea is to become taxed in two or more jurisdictions and thus obtain a tax exemption of this income in the Netherlands. This always results in reducing the overall tax burden of the taxpayer as two or more tax exempt portions of the income will apply, lower progressive or marginal income tax rates, favorable tax regimes and last but not least, lower social security contributions.
A split payroll may be applied to either directors and employees but also to self-employed individuals. We are not only able to advise you on the benefits involved in each specific situation, through our extensive network we can also provide you with the relevant employment agreements under each specific labor law regime.