When you take on an employee, or if you are seeking employment within Dutch borders, you must check that this individual (or yourself) is allowed to work in the Netherlands under the Employment of Aliens Act, also known as WAV (Wet Arbeid Vreemdelingen). For those originating from the European Economic Area (EEA) or holding an EU passport, you don’t have to apply for a work permit.
Employees with the potential to work in the Netherlands from outwith the EAA or from Romania or Bulgaria have to hold a TMV – Temporary Work Permit – before you are legally allowed to work in the Netherlands.
If you take on a person without a work permit then not only is a hefty eight thousand euro fine applied per person, but you also pay wage tax on every hour worked by each employee at the highest possible rate, dubbed ‘Anonymous Tax Rate’.
Working Visas Netherlands
Once the permit is logged, the application can take up to seven weeks to be processed.
This possession of work permits doesn’t exempt the holder from the visa requirements – it is the responsibility of the candidate to ensure that the visa is secured. The individual must make this application personally before the work permit application. Depending on the nationality of the candidate, this process can take between a few days and a few months – but EAFS can advise on this process.
Although the minimum period of employment is three months, staying in the Netherlands beyond three months isn’t considered a tourist stay any longer. In order to stay longer than three months, you will be requested to apply for a Machtiging tot voorlopig verbliif or MVV – also known as a temporary residence permit from your country of residence. Upon arrival in the Netherlands you’ll need to apply for a residence permit or VVR (Verbliifsvergunning).
Euro Accountancy & Finance Services can offer a solution under EAFS Payrolling Solutions, which allows EAFS to assume the legal status of the employer. This allows our Payrolling Solutions to apply for the permits or Highly Skilled Migrants Scheme as the formal employer.
This solution allows employers who are foreign to employ people in the Netherlands.
Highly Skilled Migrants
As of the first day of 2005, the Immigration and Naturalisation Service (IND) implemented a new policy for highly skilled migrants, or Kennismigrantenregeling as it’s known. It isn’t necessary to apply separately for a work permit for highly skilled migrants, also known as a ‘Knowledge-Employee’, due to the residence permit being issued by the IND giving the right to work for the applicant in the Netherlands.
The only required aspect for the residence permit is that the employer pays the employee a minimum of €50,183 (£42,076 as of March 2014) per year, including holidays and bonus but excluding wages in kind. This amount is less for those under the age of 30 – where the salary should be at least €36,801 (£30, 843 as of March 2014).
The employer must sign an agreement with the IND, to guarantee for any costs drummed up the employee. The entire procedure will be handled by the IND due to the lack of need for a work permit. A contract of employment according to Dutch law will also need to be signed with the employee.
Graduates who have finished their study within the Netherlands can also obtain a residence card as a Highly Skilled migrant – the required minimum salary has to be €26,373 per annum (£22,103 as of march 2014).
There are numerous instances that are a typical scene for Non-Compliance under agencies or corporates.
Most serious is the scenario where a contractor is on site with a client without a valid work permit in a scenario where a work permit is required.
Further instances of non-compliance are:
- Contractors working through offshore limited company structures incorporated in a tax haven country.
- Contractor working through a “one man” limited company structure amalgamated in a country outside the country they are working in.
- Low level contractor working independently.
- Contractor working through an umbrella or management company which is not authorized by the agency.
- Contract extended Independently on a timescale which takes her/him over two years on the same site without approval from a director or senior.
- Contractor placed as an independent when they have never operated as an independent previously.