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Do you hire out personnel to companies in the Netherlands?
From July 1st 2012 companies that hire out personnel in the Netherlands are subject to new rules based on the “Wet Allocatie Arbeidskrachten Door Intermediairs” (WAADI). Below you can read when you have to deal with these new rules when hiring out employees.
If you meet the following conditions, you will be subject to the new rules of the WAADI*:
- you hire out employees to companies in the Netherlands on a occasional or professional basis;
- you receive a fee for hiring out your employees;
- your employees are working under the supervision of a company (hirer/recipient) in the Netherlands.
*This also applies if you don’t have a business (a branch or subsidiary) in the Netherlands. These rules may even apply when you are a contractor/subcontractor hiring out staff.
Do you meet the above-mentioned conditions? You are legally obliged to register the hiring out of your employees in the Dutch Trade Register. If you don’t do this, you and the company that hires your employees can receive high penalties!
You hire employees within the Netherlands?
The above-mentioned rules are also of your concern. For example: you hire personnel from a Dutch temporary employment agency (‘uitzendbureau’). If the Dutch temporary employment agency isn’t registered in the Dutch Trade Register, you can also get high penalties.
Our experience shows that companies that need to be registered due to the rules of the WAADI, often overlook other important matters. For example: you dispatch employees to a company in the Netherlands. Your company needs to be registered in the Dutch Trade Register. Additionally, you must consider the following matters:
Which country may levy tax on the salaries of the foreign employee? There is a good chance this is defined by a tax treaty with the Netherlands. In most cases wage taxes need to be paid in the Netherlands. However, we often see that the employer incorrectly pays the wage taxes due in the wrong country (domicile country of the employer). Obviously this means high risks for the future.
- social insurance;
In which country does the foreign employee have his social insurance and where must the social premiums be paid? This can depend on European regulation, if an European employer is involved. Under certain conditions the foreign employee can stay socially insured in his country of residence. If this is the case the foreign employee needs an a A1-certificate.
- blocked account / G-account;
A Dutch company hiring employees wants to limit his liability (Sequential Liability Act) for Dutch wage taxes by paying a part of the bill to a blocked account / G-account. We recommend you to get good advise on this matter.
- social security number;
All employees working in the Netherlands must have a social security number (BSN / burgerservicenummer or sofinummer).
- other matters of your concern.
Do you work with personnel from non-European countries or from Romania or Bulgaria? There is a good chance the employees need a working permit or should be registered at the Dutch Institute for Employee Benefit Schemes. If this does not happen, illegal employment applies and you risk getting very high penalties! This is also the case if they can legally work in other EU countries.
Do you have any questions? Please contact us by filling out the contact form. One of our English speaking consultants will contact you at short notice.
Date: September 4th 2012