Working for a foreign client: where do you pay tax?
Written by Ilias Aarrass5 min read · Last reviewed on 
Written by Ilias Aarrass5 min read · Last reviewed on Ever more freelancers have clients across the border: a German agency, an American startup, a Belgian web shop. The first time raises big questions. Do I owe tax there? Do I need a foreign VAT number? The reassuring answer for anyone simply working from the Netherlands: your profit remains fully taxed in the Netherlands, and for VAT one rule per situation determines your invoice. Only those physically working abroad for longer face more.
Income tax: your country of residence levies
Living and working in the Netherlands, you pay Dutch income tax on your entire profit, wherever your clients sit. Your client's nationality, the currency or the bank account's country change nothing. Tax treaties assign business profit to your country of residence, unless you have a permanent establishment in the other country, like an office or workshop there. For the remote freelancer that is virtually never the case. If your American client requests a W-8BEN form, you are confirming exactly this: you are not a US taxpayer, so nothing is withheld.
VAT: one rule per situation
For services to business clients the main rule is that VAT is levied where the customer sits. That yields three standard cases:
| Client | Invoice | Also arrange |
|---|---|---|
| Netherlands | With Dutch VAT as usual | Nothing extra |
| Other EU country, with VAT number | Without VAT, marked reverse-charged | Check the number in [VIES](kb:btw-nummer-controleren-vies), EC sales listing |
| Outside the EU, such as US or UK | Without Dutch VAT | Keep proof of business status |
Practical points that do need attention
The tax is the easy part; arrange these deliberately:
- Currency and exchange risk: agree the invoicing currency and process receipts per invoicing in foreign currency.
- Payment terms and collection: your Dutch terms apply only if declared applicable; also fix choice of law and payment arrangements in the contract.
- Your rate: benchmark against local norms; for American and British clients rates often sit above your Dutch price.
- Physically working abroad, structurally or for months, can create tax and social security consequences there; seek advice beforehand.
Frequently asked questions
My foreign client wants me on their payroll as a contractor. Possible?
Once you effectively enter employment with a foreign employer, different rules apply than for entrepreneurship, premiums included. Keep invoicing as a business and nothing changes; working through a foreign payroll construct deserves advice first.
Does foreign revenue count for my deductions and the KOR?
For income tax all profit counts, including for the hours criterion and the self-employed deduction. The KOR revenue limit looks at Dutch revenue; with mostly foreign business clients the KOR rarely helps.
Must I draft my invoice in English?
Allowed and client-friendly, but not mandatory. Above all ensure the required invoice details are present, including both VAT numbers and the reverse-charge mention for EU clients; an English 'VAT reverse-charged' is fine.
My client withholds tax on my invoice anyway. Now what?
Some countries levy withholding taxes on certain services such as royalties. First request the proper treaty form; the withholding often lapses. If withheld anyway, the paid tax can usually be credited in your Dutch return.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
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Ilias
