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If you run a business in the Netherlands that intends to outsource work to contractors, subcontractors or freelancers/self-employed entrepreneurs (zzp'ers), you can use this checklist to quickly determine which rules and regulations you must follow. It also includes a number of obligations that apply specifically to hiring staff from outside the Netherlands. This checklist applies only if the workers come to the Netherlands to do the work.
1. Verify and record the outsource employees' identity
You are obliged to verify the identity of all workers on the basis of an original identity document. This also applies to freelancers/self-employed entrepreneurs or employees of contractors/subcontractors to whom you outsource work.
2. Make sure you don't have to pay payroll tax
When you hire staff via an outsourcing construction, the company you do business with is liable for payroll tax. However, the Dutch Tax and Customs Administration may hold you liable for the payroll tax owed by your contractor or subcontractor. One way of preventing liability for payroll tax and turnover tax is to ask this company to set up a blocked account (G account).
Please note: By doing business with an SNA-certified company you run less risk of claims from the Dutch Tax and Customs Administration if this company fails to meet its obligations.
3. Is it outsourcing, or an employment relationship?
If you are outsourcing work to a freelancer/self-employed entrepreneur, either resident or non-resident, you must make sure there is no (notional) employment relationship. In order to be certain on this point, you can conclude a model agreement with the freelance/self-employed worker. If there is an employment relationship, you have to pay payroll taxes for the freelancer.
4. Provide safe and healthy working conditions
As an employer, you must provide a safe and healthy workplace for all personnel, including freelancers/self-employed workers and employees who are working for you via a contractor/subcontractor.
5. Establish working hours and rest times
The Working Hours Act states the number of hours that employees are permitted to work and when they are entitled to breaks. This Act also covers workers that you employ via contractors/subcontractors and, in some cases, to freelancers/self-employed entrepreneurs to whom you outsource work.
6. Ensure that all workers receive at least the Dutch minimum wage
Every worker has the right to the minimum salary in Holland plus the standard holiday allowance. If you outsource work to employees of contractors/subcontractors you are also responsible for them receiving at least the Dutch minimum wage. This provision should be part of your contract with the subcontractor or agency.
Avoid chain liability for wages
When you hire workers via a subcontractor, who in turn perhaps hires these workers from a temp agency, you and all the parties involved constitute a chain. All parties in the chain can be held liable for the payment of the workers. If you want to avoid having to pay double because your subcontractor fails to pay the employee, make sure you are dealing with a reliable and creditworthy partner. The Inspectorate SZW has prepared a brochure to help you avoid chain liability for wages; you can download it from the Government.nl website.
7. Pay or deduct turnover tax (VAT)
The contractor/subcontractor or freelancer/self-employed entrepreneur to whom you outsource work will charge VAT on that work. You can deduct this VAT as input tax. In some sectors, the subcontractor is obliged to reverse charge VAT to you. This also applies if you outsource work to a foreign entrepreneur.
8. Recruit staff from the Netherlands and the EEA first
You are obliged to recruit staff first in the Netherlands, the European Economic Area (EEA) and Switzerland. You are only allowed to look for staff in other countries if you can not find suitable staff in these countries.
9. Find out if a work permit is needed
When outsourcing work to foreign workers, you have to check whether they need a work permit. The contractor or subcontractor must apply for this permit; in the case of freelancers/self-employed entrepreneurs, you must apply yourself.
10. Get an E101/A1 statement
If you outsource work to a foreign worker, in some situations they may remain covered by social insurance in their own country. In that case you are not required to pay social security contributions for this worker. To be certain on this point, you can ask your contractor or subcontractor to submit an E101/A1 statement.