Preventing liability for payroll tax and VAT for temporary staff

Do you run a company in the Netherlands? And do you hire temporary staff via an intermediary such as an employment agency or secondment agency? Or do you subcontract work to a contractor/subcontractor? In both cases the intermediary or contractor/subcontractor must pay the payroll tax for these temporary staff. As the hirer you are liable for this.

If the intermediary or (sub)contractor fails to pay the payroll tax, the Dutch Tax and Customs 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 Dutch Tax and Customs 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 (sub)contractor that has an SNA quality mark from the Dutch Labour Standards Foundation (Stichting Normering Arbeid, SNA). You can find the certified agencies in the SNA register (in Dutch).
• ask your intermediary or (sub)contractor for a payment history report from the Tax and Customs Administration (in Dutch). This report will show whether your intermediary or (sub)contractor had paid his payroll tax at the time the report was compiled.
• pay the estimated amount of payroll taxes and/or VAT into the G account of the temporary employment agency or (sub)contractor.
• keep proper records so the Dutch Tax and Customs Administration can verify the identity of the hired staff.

Dispensation scheme

Have the payroll taxes and/or VAT not been paid (in full) and is this not your fault, nor the agency’s or the subcontractor’s fault? The liability may not apply. For example, if the economy suddenly becomes very bad or in case of extreme weather conditions. In such cases you can call upon the dispensation scheme (disculpatieregeling).

The Dutch Tax and Customs 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) and Liability for payroll tax when using a subcontractor (Aansprakelijkheid voor loonheffingen bij onderaanneming).