What needs to be done when employees are sent to the Netherlands?
Your employees may need a residence permit or a visa to reside in the Netherlands. They must register with the local municipal authority if they remain in the Netherlands for longer than 4 months.
Certain professions may only be practised in the Netherlands if your employees have the correct certificate. They must have this certificate officially recognised by the competent authority in the country where they obtained it.
You must apply for work permits for your employees if they are from outside the EEA/Switzerland or from Romania or Bulgaria. If your business is based in the EEA or Switzerland, however, these work permits will not be required but you do have a duty of notification.
You are obliged to find suitable accommodation for employees who need a work permit. In doing so, you must comply with the rules of the municipality where your employees will be working.
If your employees work in the Netherlands on a temporary basis, they can sometimes remain insured for social security purposes in the country where your business is based. For this purpose you will need to apply for an E101/A1 statement.
If your employees cannot obtain E101/A1 statements, they will be insured for social security purposes in the Netherlands and you must withhold the relevant contributions from their wages. In that case, your employees will also be obliged to take out healthcare insurance in the Netherlands.
In most cases, you are obliged to pay payroll tax in the Netherlands for your employees. Sometimes you must also pay VAT. For this purpose you must register with the International Office of the Dutch Tax and Customs Administration.
To be able to pay payroll tax, you will need each employee’s citizen service number or tax and social insurance number. They have to collect this number personally – by appointment – from the Tax and Customs Administration.
If you do not pay your payroll tax, your customer will be held liable. To prevent this, your customer may ask you to set up a blocked account (G account) with the Dutch Tax and Customs Administration.
Some sectors in the Netherlands have concluded a Collective Labour Agreement (CAO). If the CAO has been declared mandatory by the Ministry of Social Affairs and Employment, you as a foreign employer must observe a number of key provisions.
Everyone working in the Netherlands is entitled to the statutory minimum wage and a holiday allowance. As a foreign employer, you also have to pay at least this minimum wage.
You must comply with the Dutch Working Hours Act with regard to your employees in the Netherlands. This Act states how many hours your employees may work on a daily and weekly basis. Your employees are also entitled to a minimum number of days’ leave on full pay.
You are obliged to keep payroll records for the Dutch Tax and Customs Administration and to file payroll tax returns. Once you have registered with the Tax and Customs Administration, you will receive an invitation to file a tax return. Expatax can arrange this for you. Also check whether your employees qualify for the 30% ruling.
You may have to charge your customer turnover tax (VAT) for the services performed by your employees in the Netherlands. In that case, you have to file VAT returns in the Netherlands. However, sometimes the VAT levy is reverse-charged to your customer and you are not required to pay VAT.
Follow the steps above when you transfer, send, post or detach an employee to the Netherlands and you will prevent problems! Contact Expatax for assistance.