Preventing liability for payroll tax and VAT for temporary staff
Do you hire temporary staff via an intermediary such as an employment agency or secondment agency in the Netherlands? Or do you outsource work to a subcontractor ? In both cases the intermediary or subcontractor must pay the payroll tax for these temporary staff. As the hirer you are liable for this.
Intermediary or contractor does not pay payroll tax or VAT
If the intermediary or subcontractor fails to pay the payroll tax, the Netherlands Tax Administration (Belastingdienst) can hold you liable (in Dutch) and they may fine you. If you do not agree with this, you can object within 6 weeks of the decision.
If you hire staff via an intermediary, the Tax Administration may also hold you liable for the VAT (turnover tax) owed by this intermediary on the work carried out.
Preventing or limiting liability
You can prevent or limit liability if you:
- make sure you work with an intermediary or subcontractor that has a quality mark from the Dutch Labour Standards Foundation (Stichting Normering Arbeid, SNA). You can check whether an agency is certified in the SNA register (in Dutch).
- ask your intermediary or subcontractor for a payment history report from the Tax Administration (in Dutch). This report shows if your intermediary or (sub)contractor paid his payroll tax when the report was compiled.
- pay the estimated amount of payroll taxes and/or VAT into the G account of the temporary employment agency or subcontractor.
- keep proper records so the Tax Administration can verify the identity of the hired staff.
Dispensation scheme
Have the payroll taxes and/or VAT not been paid, or only in part? And is this not your fault, nor the agency’s or subcontractor’s fault? For example, if the economy suddenly deteriorates or in case of extreme weather conditions? In such cases you can call upon the dispensation scheme (disculpatieregeling, in Dutch).
The Netherlands Tax Administration offers more information in the Dutch-language brochures:
- Liability for payroll tax and VAT when hiring in staff (Aansprakelijkheid voor loonheffingen en btw bij inlening van personeel, paragraph 5.3)
- Liability for payroll tax when using a subcontractor (Aansprakelijkheid voor loonheffingen bij onderaanneming, paragraph 6.3)