Many of us, especially those that do freelance work, have encountered those fiesty but misinformed company accountants who enjoy trying to tax us at 10 or 20%. This is usually not necessary. This page may be useful in such cases:
anyone up for a quick (and dirty) translation so that i know what i’m presenting?
thanks taffy, but i had already gone through most of that.
the closest thing i found was:
which doesn’t specifically mention the freelance work.
Your page had a lot of links, so it is not clear what in particular you are referring to. However, it is not true that accountants are misinformed for withholding at 10-20% rates for non-salary income. Non-salary income includes things such as royalty, interest, dividends, professional services, performances, rental income, etc. which are not paid as part of a regular salary or by the hour.
If you are getting paid for something not as part of an employment contract or not on an hourly basis then there are separate rates for withholding. This has nothing to do with whether you are a foreigner either. If you want to have withholding done at the salary rates, you will need to be paid a salary or hourly rate as an employee.
If you are unsure of the correct withholding rate for your type of freelance work you can consult the withholding desk at your local tax office.
Most companies prefer to pay for freelance work as a professional service because then you are not considered an employee which means they don’t need to worry about paying health insurance, pension, or giving vacation time, severance, etc. In that case, the professional service withholding rate needs to be used.