Expatax: posting an employee to the Netherlands

The 10-step guide to posting employees to the Netherlands

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International companies may need to relocate employees to the Netherlands for various assignments, but if done only infrequently, it can be a difficult road to navigate.

Employees on assignment abroad are just temporary expats, but they, along with the employer—foreign or not—must abide by the laws, rules and regulations of the Netherlands and the European Union. Posted workers live and work in their new country for a set period of time, and do not integrate into the labour market; otherwise, they are called EU mobile citizens.

Expatax, a full-service tax and accounting firm in the Netherlands, offers a guide to properly posting employees to the Netherlands, helping to avoid any missteps or hassles down the line.

1. Determine if the employee may legally reside in the Netherlands

If a company needs to send an employee to the Netherlands on assignment, the employee may need a residence permit or a visa to reside in the Netherlands, which depends on a variety of factors: place of original residence and the length of stay, for example. Those that stay fewer than 90 days may only need a work permit; those that stay longer than that time may need a combination residence and work permit, known as GVVA. Companies that are based outside then Netherlands but within the European Economic Area (EEA) or in Switzerland may not need to seek permits for employees on temporary assignment, provided the employees are allowed to work in the company’s country of establishment, and the service does not involve the recruitment of other personnel. Employers must also notify the UWV.

Anyone who comes to the Netherlands, however, must register with the local municipal authority if they remain in the country for longer than four months.

2. Ensure employees have the required professional qualifications

Some professions are regulated in the Netherlands, e.g. architects and translators, meaning that they can only be practised by those that hold the correct certificate or diploma. Foreign certificates or diplomas must be officially recognised by the country in which they received the qualification or degree.

Posting an employee to the Netherlands: temporary employee laws

3. Apply for the proper work permits for posted employees

Employees from countries outside the EEA or Switzerland—or those that are from Romania or Bulgaria—must possess work permits in order to work in the Netherlands. If the business is based in the EEA or Switzerland, work permits are not required but the company must notify the UWV. 

4. Find housing for posted workers in the Netherlands

Companies with employees that require work permits must also provide housing for those employees, following the rules of the municipality in which they will work.

5. Determine social security for posted workers in the Netherlands

Employees that work in the Netherlands on a temporary basis may sometimes continue to contribute to the social security in the country in which the employer is based. The employer, not the employee, must apply for the A1 statement, formerly referred to as the (E)101, to prove that the employee contributes social security elsewhere.

6. Check whether the employees must enrol with Dutch health insurance

If the employer cannot obtain an A1 statement for the employee, the employee must contribute to social security in the Netherlands. The employer must withhold the necessary contributions from the employee’s wages, and the employees must also enrol with the healthcare system in the Netherlands.

7. Register with the Dutch Tax and Customs Administration

Employers are generally required to pay payroll tax in the Netherlands, as well as VAT, so it is important to register with the International Office of the Dutch Tax and Customs Administration.

Employers will need each employee’s citizen service number (BSN, or burgerservicenummer) or tax and social insurance number, which must be collected in person by appointment from the Dutch tax authorities. If the employer does not pay the payroll tax, the customer will be held liable; to prevent this, customers may ask the employer to set up a blocked account (g account) with the Dutch Tax and Customs Administration.

Employers are required to file payroll tax returns and keep records. Once an employer has registered with the Tax and Customs Administration, he or she will receive an invitation to file a tax return. It is also important to check whether the employees qualify for the 30 percent ruling.

Expatax: temporary employee laws

8. Determine if a Collective Labour Agreement applies

Some industries and sectors in the Netherlands have Collective Labour Agreement (CAO). If the CAO has been declared mandatory by the Ministry of Social Affairs and Employment—or if the employer has personally arranged it, or it is a member of an employer’s organisation—they must abide by the rules of that CAO.

9. Comply with temporary employee laws in the Netherlands

WagwEU, also known as the Terms of Employment Posted Workers in the EU Act, was enacted in June 2016. It ensures that everyone—especially posted workers—is treated fairly. The act stipulates the maximum working hours and minimum rest hours; mandatory holiday allowance; and a satisfactory work environment, among other things.

10. Determine applicable VAT charges

A company may have to charge value-added tax (VAT), or turnover tax, for services rendered by employees in the Netherlands. If applicable, companies must file VAT returns in the Netherlands. However, VAT is sometimes reverse-charged to the customer (e.g. if the customer is located in a EU country different from the business); in this case, the employer is not required to pay VAT.

Follow the 10 steps when transferring or posting an employee to the Netherlands and ensure that the Dutch temporary employee laws are followed to ensure a smooth transition for both the relocated employees and the employer.

 

 

Expatax / Expatica

 
 

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