Foreign Suppliers: Knowledge Document for the Organisation

Introduction

This document is the cross-border deepening of the knowledge document on identity checks, the BSN, WAADI, and the G-account. Where that document focuses on the basic principles, this document specifically covers the situation where we do business with a foreign supplier — for example, a German, Belgian, or Polish staffing or secondment company that makes workers available in the Netherlands.

The key message upfront: the same risks apply, simply across the border. A foreign supplier is not a way to escape Dutch regulations — if anything, a number of additional points of attention are added.

After going through this document you will be able to:

• explain why hirer's liability applies in full to foreign suppliers;
• state what is needed for a foreign supplier to have a valid WAADI registration and a G-account;
• explain the 183-day rule and apply it to a simple example;
• state the risk of a missing or invalid A1 declaration;
• distinguish between the two most common hiring situations involving a foreign supplier.

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1. The same risk, across the border

If you do business with a foreign company, the same risks apply for unpaid payroll tax as when you do business with a staffing agency based in the Netherlands. For VAT, this is usually different: it is common for VAT to be reverse-charged by the foreign supplier to the Dutch company (intra-Community services), meaning the VAT risk is nil. This is not the case for payroll tax.

Foreign-based staffing agencies that make workers available to a Dutch company must remit payroll tax in the Netherlands for the hired-out workers from the first working day. Unpaid, or incorrectly declared, payroll tax can be claimed by the Tax Authority from the Dutch company up to 5 years later. Hirer's liability therefore applies in full — including with foreign suppliers, and even if the invoices to that foreign company have already been paid in full in the past.

In order to file payroll tax returns, the foreign supplier of agency workers must be registered with the Chamber of Commerce under the WAADI. Note: only then can the supplier actually file and remit payroll tax. Always check, before entering into business with a foreign supplier, whether it is registered with the Chamber of Commerce with the correct details.

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2. WAADI registration for foreign suppliers

The following applies to a foreign supplier that makes workers available in the Netherlands:

Registration as a supplier in the Trade Register

Even if the company has no establishment in the Netherlands, it must register in the Dutch Trade Register as a company that makes workers available. This follows from the WAADI. If the company fails to do so, a fine can be imposed (see the previous knowledge document for the fine scale). We, too, as the Dutch hiring party, must check ourselves whether this registration is in place — we may not simply assume this.

No Dutch establishment needed

A foreign company without a permanent establishment in the Netherlands does not automatically need to set up a Dutch BV or branch. If the company has no permanent establishment, a branch is not mandatory. However, registration with the Tax Authority may be needed as soon as Dutch tax or VAT obligations arise.

The Wtta adds an extra layer

In addition to registration in the Trade Register, a supplier that falls under the Wtta will also need a Wtta admission in order to be allowed to make workers available in the Netherlands. One of the conditions for that admission is precisely registration in the Trade Register — the two requirements are therefore linked.

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3. The G-account for a foreign supplier

Can a foreign supplier get a G-account?

Yes. A foreign supplier that hires out or seconds personnel in the Netherlands can obtain a G-account, provided it is liable to withhold payroll tax in the Netherlands and/or holds a Dutch VAT number. The G-account is linked to a Dutch payroll tax sub-number and/or VAT sub-number.

In practice, this usually means the foreign company:

• has a Dutch payroll tax number and/or VAT number;
• has a business bank account with a bank that offers G-accounts;
• applies for a G-account with the Tax Authority after the tax numbers have been assigned.

Practical bottlenecks

In practice, it is often difficult for foreign companies to open a G-account, because:

• a G-account is only offered by Dutch banks;
• a business bank account is usually needed first;
• banks have no obligation to accept clients and screen foreign companies extensively.

The link to the Wtta

This is a current point of attention within the Wtta: the law also applies to foreign suppliers. The government has therefore investigated how foreign, admitted staffing companies can gain access to a G-account or an equivalent alternative, precisely because opening a Dutch business account does not always succeed in practice.

What if the G-account really doesn't work out?

In principle, we cannot waive the requirement for a G-account. With a number of our brands, we are SNA (NEN) or Bovib certified, and we are ourselves required to request a G-account from our supplier — otherwise we risk losing our own certification. In addition, with the upcoming Wtta, we want all our brands to be certified so that they can be more easily admitted to the new system later on.

There is one exception: if the supplier can provide us with a letter of rejection for the G-account from the Tax Authority, we can accept an accountant's statement as an alternative, issued by a registered accountant (RA or AA). This statement must be submitted again every quarter. The costs of this are borne by the supplier.

Note: no G-account from a sister company

We cannot pay into the G-account of a sister company of our supplier with exempting effect. This must always be the G-account of the supplier with whom we conclude the contract.

The percentages

Just as with Dutch suppliers, the percentage to be paid in depends on the certification status — but for a foreign company, the percentages are slightly lower:

	No certification	NEN-4400-1 / NEN-4400-2
Dutch company	55%	25%
Foreign company	40%	20%

We cannot be held liable for the part of the invoice that has been paid into the supplier's G-account.

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4. The 183-day rule

What is it?

The 183-day rule determines which country has the right to tax — in other words, in which country tax must be paid for the employee, in order to prevent double taxation. The rule of thumb is that the country where the work is carried out also has the right to tax. However, if someone lives in a different country from where they work, double taxation could arise without further arrangements. To prevent this, tax treaties have been drawn up between European countries, with rules determining whether the country of residence or the country of work may levy tax.

An example

Suppose a professional lives in Germany, is employed by a German company, but works in the Netherlands. In principle, the Netherlands would then be entitled to levy tax — the employer would have to pay tax in the Netherlands for the work carried out there, and in Germany for the work carried out there. Without further arrangement, this results in double taxation.

How does the rule work?

If the professional stays in the Netherlands for fewer than 183 days, the salary is paid by the German employer, and that German employer has no permanent establishment in the Netherlands, then Germany may levy the tax.

Important: this concerns physical presence in the Netherlands — not just days worked. Does the professional come to the Netherlands for a weekend or a holiday? That counts. Does the professional come to the Netherlands to run errands? That counts too. In short: every day the professional crosses the border into the Netherlands counts towards this rule.

Who does this rule apply to?

The 183-day rule does not apply to foreign self-employed professionals with a business comparable to a Dutch sole proprietorship. The rule applies to employees employed by a foreign company — and that can also be a self-employed entrepreneur who is employed by their own foreign company (for example, a Limited or a BVBA).

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5. The A1 declaration

What is it?

A1 is the name of a European form, used by all countries of the European Union. An A1 declaration is a document that shows in which country social security contributions are paid. If there is a valid and complete A1 declaration, you may rely on the fact that social security contributions are duly paid in the professional's home country.

What is the risk?

Without a valid A1 declaration, we, as the hiring party, run the risk of being held chain liable for unpaid social security contributions. These contributions can be claimed up to five years back — the costs of this can be enormous.

An additional risk to watch out for closely: in hiring and re-hiring structures via intermediaries, the A1 declaration can be invalid. If there is no direct link between the original employer and the hiring party in the Netherlands, Dutch social security obligations apply after all — with all the tax and legal consequences that entails. This is precisely what we need to pay attention to in our own chain structures.

Where does a professional apply for an A1 declaration?

• Does the professional work in more than one country? Then they apply for the A1 at the competent authority of the country where they live.
• Is the professional a seconded employee or self-employed? Then the A1 is applied for in the country of origin.

The A1 form should, in principle, be applied for before the start of the international employment, although it can also be applied for retroactively. The application is submitted to the social security authorities of the country to whose social security the professional will be subject.

Validity period

For secondment, the A1 form is issued for the duration of the secondment, with a maximum of 24 months. This period can only be extended based on agreements between two member states, up to a total period of a maximum of 5 years. After that, the employee must, in principle, switch to the social security legislation of the country of work.

Note: three practical points of attention

• Option 3.1 checked? If we receive an A1 declaration on which this option is checked, we may not hire this person.
• Maximum duration for secondment: the form is issued for the duration of the secondment, with a maximum of 24 months.
• Work location correctly stated: under point 5.2 of the A1, the work location of the client must be stated — not that of our own organisation.

Recording in Select/Striive

This step is automatically opened based on the answers in the tax domicile questionnaire. An issue date and an end date must be entered.

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6. Two practical situations explained

Situation 1: supplier established outside the Netherlands but within the EU, work location is in the Netherlands

Required:

• Registration in the Dutch Trade Register;
• Assessment against the 183-day rule;
• WAADI registration;
• G-account;
• A1 declaration;
• Identity check (for example, CheckedID);
• Completing the decision tree for employee/tax domicile;
• File requirements towards the client (screening, references, Certificate of Conduct, etc.).

Important to include in the sub-agreement: "The Professional is, without prior written permission from HeadFirst, not permitted to work at a location or in a country other than the location/country stated on the Contract for Services."

Situation 2: supplier established outside the Netherlands but within the EU, work location is also outside the Netherlands

Required:

• Registration with the Chamber of Commerce of the relevant country (varies by country);
• An A1 declaration, if relevant (for example: supplier established in Belgium, professional working in France);
• Identity check (CheckedID);
• Completing the decision tree for employee/tax domicile;
• File requirements towards the client.

The same clause on work location, mandatory to include in the sub-agreement, applies here too.

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7. Frequently asked questions

Can we waive the requirement to provide a G-account?
In principle, no. See Chapter 3 for the only exception: a letter of rejection from the Tax Authority, combined with a quarterly statement from an RA or AA accountant.

Can we use the G-account of a sister company of our supplier?
No. We can only pay in with exempting effect to the G-account of the supplier with whom we ourselves conclude the contract.

"I already pay social contributions in my own country, why do I need to apply for an A1?"
Under Dutch law, everyone who works in the Netherlands must pay social contributions. However, the Netherlands has agreed with European countries in tax treaties that holding an A1 declaration from the country of residence or taxation prevents double levying. Without that declaration, the Dutch obligation to pay contributions applies in principle.

"The SVB says I don't need to apply for an A1 in the Netherlands, what now?"
If you live in a country other than the Netherlands, you apply for the A1 at the equivalent authority in your country of residence — not at the SVB in the Netherlands.

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8. Why this matters to us

• The risks do not disappear across the border — if anything, they become greater. A foreign supplier adds extra checkpoints (WAADI registration without a Dutch establishment, a G-account that is harder to open, the 183-day rule, the A1 declaration) on top of the risks that already apply with a Dutch supplier.
• The 5-year period casts a long shadow: for both payroll tax and social security contributions, the Tax Authority can look back up to 5 years — even if invoices have long since been paid.
• The Wtta directly affects this topic, both through the admission requirement for foreign suppliers and through the search for a G-account alternative for foreign parties.
• Our own chain structures are a point of attention: the nuance that an A1 declaration can be invalid in hiring and re-hiring structures via intermediaries without a direct link directly applies to how we set up links in the chain ourselves.
• Connection with other knowledge documents: this topic builds directly on the knowledge document on identity checks, the BSN, WAADI, and the G-account, and relates to the Bovib/Wtta knowledge document where it concerns the admission requirement for foreign suppliers.

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9. Glossary

Term	Explanation
Hirer's liability (cross-border)	Applies in full to foreign suppliers: unpaid Dutch payroll tax can be claimed from the Dutch company up to 5 years later.
183-day rule	A rule that determines which country has the right to tax the wages of a cross-border employee, based on the number of days physically present in the country of work.
Permanent establishment	A durable business establishment in a country; the absence of a permanent establishment in the Netherlands is relevant both for the 183-day rule and for the registration requirement.
A1 declaration	A European form that shows in which country an employee's social security contributions are paid.
Re-hiring (in relation to the A1 declaration)	When an employee is seconded via the foreign company to yet another company; the A1 declaration can then become invalid, with the risk of Dutch contributions still being owed.
Tax domicile	The questionnaire/decision tree used to establish which tax and social security regime applies to a professional.
Wtta admission	The licence that will (in addition to WAADI registration) be needed to be allowed to make workers available in the Netherlands as a supplier — including as a foreign party.

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Further information

This document is not legal or tax advice. For the most current regulations: the website of the Tax Authority (hirer's liability, G-account, 183-day rule), the Social Insurance Bank (A1 declaration), and the Chamber of Commerce (WAADI registration). If in doubt about a specific situation, particularly with more complex chain structures: contact Legal.