Outsourcing work

1. Verify and record the employees’ identity

You are obliged to verify the identity of all workers on the basis of an original identity document. This also applies to self-employed entrepreneurs or employees of contractors/subcontractors to whom you outsource work.

2. Avoid liability for payroll tax

The Tax and Customs Administration may hold you liable for the payroll tax owed by your contractor/subcontractor. One way of preventing that situation is to ask this company to set up a blocked account (G account).

Please note: By doing business with an SNA-certified company you run less risk of claims from the Tax and Customs Administration if this company fails to meet its obligations.

3. Assess whether an employment relationship exists

If you outsource work to a self-employed entrepreneur, either resident or non-resident, you must check whether a (notional) employment relationship exists. In order to be certain on this point, you can ask the self-employed worker to submit a Declaration of Independent Contractor Status (VAR).

4. Provide healthy and safe working conditions

As an employer, you must provide a healthy and safe workplace for all personnel, including self-employed workers and employees who are working for you via a contractor/subcontractor.

5. Establish working hours and rest times

The Working Hours Act states the number of hours that employees are permitted to work and when they are entitled to breaks. This Act also covers workers that you employ via contractors/subcontractors and, in some cases, to self-employed entrepreneurs to whom you outsource work.

6. Ensure that all workers receive at least the minimum wage

Every worker has the right to the statutory minimum wage plus the standard holiday allowance. If you outsource work to employees of contractors/subcontractors you are also responsible for them receiving at least the statutory minimum wage.

7. Pay or deduct turnover tax (VAT)

The contractor/subcontractor or self-employed entrepreneur to whom you outsource work will charge VAT on that work. You can deduct this VAT as input tax. In some sectors, the subcontractor is obliged to reverse charge VAT to you. This also applies if you outsource work to a foreign entrepreneur.

Outsourcing work to workers from outside the Netherlands

1. Recruit staff from the Netherlands and the EEA first

You are obliged to recruit staff first in the Netherlands, the European Economic Area (EEA) and Switzerland. You are only allowed to look for staff in other countries if you can not find suitable staff in these countries.

2. Assess whether a work permit is required

If you outsource work to foreign workers, you have to check whether they need a work permit. The contractor/subcontractor must apply for this permit; in the case of self-employed entrepreneurs, you must apply yourself.

3. Verify the E101/A1 statement

If you outsource work to a foreign worker, in some situations he may remain covered by social insurance in his own country. In that case you are not required to pay social security contributions in respect of this worker. In order to be certain on this point, you can ask your contractor/subcontractor to submit an E101/A1 statement.

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