If you or your company has a registered office or workplace in the Netherlands with employed staff, then you have to deduct the correct Dutch Payroll tax from employee’s salaries. The Dutch Payroll tax is built from wage tax, employee’s insurance contributions, social security contributions and income-dependent Health Care contributions.
You are obliged to deduct Dutch Payroll Tax when;
- Your company has its office registered within the Netherlands
- You have a permanent establishment in the Netherlands
- You post, hire out or second personnel in/to the Netherlands.
- Your employee works on the Dutch continental shelf.
- Your employee falls under the national insurance schemes of the Netherlands.
In some situations, you are obliged to Dutch Payroll tax; even if your company has its main registered office within another country.
If you employ staff, then you must do the following;
- Register as an employer with the tax and customs administration. This will result in receiving a payroll tax number alongside the required forms needed. Your Dutch Payroll tax number is then used when submitting returns and with the regard to other types of contact with the tax and customs administration offices.
- Ask your employee to provide you with a written statement including their surname and initials, address and postcode and their place of residence, country and region of residence alongside their date of birth and citizen service number (burgerservicenummer) or tax and social insurance number (also known as a sofinummer).
- Verify and record each employee’s identity with the case of foreign workers including the check of whether of not they are allowed to work within the Netherlands.
- Create a Dutch Payroll record.
- Determine the elements of the wage for the employee and then calculate the correct associated taxes and any contributions required by law.
- File the tax return by the given deadline and pay the calculated taxes. The tax and customs administration office will inform you to the date and how to file the return properly.
Should the employer or the employee fail to comply with the obligations relating to Dutch Payroll Tax or the confirmation of employee identity, then they will have to apply the ‘anonymous person rate’.
Under specific conditions, individuals can set off a VAT payment against a Dutch payroll tax declaration. However, in order to do this the Dutch form (verzoek loonheffingen verrekening met teruggaaf btw) has to be used.
Should an organisaiton hire temporary staff via an intermediary or subcontract out work to a contractor or subcontractor then the hired persons must pay the payroll tax for these staff members. If the company fails to follow these procedures then the Dutch authorities will hold the employer responsible and, therefore, liable.