Tax Lawyer Friso van de Weerdt on Fiscal Chain Liability in Hiring and Temporary Employment Situations
Monday 23 December 2024
Tax lawyer Friso van de Weerdt highlighted the key aspects of these topics during our seminar, explaining the complexity of the Chain Liability Act (Wka).
Understanding self-employment structures and the classification of bogus self-employment is essential for anyone operating within these legal frameworks.
Fiscal Chain Liability
Since 2010, companies can—under certain circumstances—be held responsible for the wages of employees working for other companies if those wages fall below the minimum wage. This is known as fiscal chain liability. Since 2012, companies must also be registered with the Chamber of Commerce to avoid fines. Whether a company is held responsible for another party’s wages depends on the degree of influence it has over the workers. There must be a form of employer–employee relationship between the hiring company and the temporary workers.
Fiscal chain liability applies to companies that hire personnel through third parties. It means that the hiring company and the contractor can be held jointly liable for unpaid wage taxes and social security contributions owed by subcontractors.
An important distinction is that chain liability does not apply to unpaid VAT, unlike inlenersaansprakelijkheid (hirer’s liability). For this reason, companies need clear guidance from a tax lawyer to understand these differences and take appropriate preventive measures.
Maintaining proper administration and complying with legal requirements allows companies to avoid the pitfalls of fiscal chain liability. Flexibility and quality must go hand in hand when managing these responsibilities.
Chain Liability Act (Wka)
The Wet Ketenaansprakelijkheid (Wka) makes contractors and hirers jointly responsible for the wage taxes that their subcontractors are required to pay. This liability arises because a contractor, subcontractor and potentially hired labor forces are all involved in executing a project. As a result, every link in the chain can be held accountable for the wage taxes of subsequent links.
Hirer Reliability
When hiring personnel, the hirer is jointly liable for the wage taxes and VAT that the supplier fails to pay. To limit these financial risks, the hirer must meet several conditions, such as obtaining a declaration of good payment behavior from the supplying company.
Hirer’s liability extends beyond the direct relationship between hirer and supplier and applies to the entire chain of hiring companies. This means that intermediary companies can also be held liable. Proper administration and strict compliance with the rules are essential to minimize liability and safeguard the financial stability of your organization.
Contracting Work and Hiring Situations
Hiring personnel refers to situations in which an employee remains under contract with their employer but is made available to a third party. In this setup—where the hirer exercises supervision—the responsibility for wage tax obligations remains significant. Proper administration and strict adherence to guidelines are necessary to avoid complications. Chain liability reinforces reliability and quality within the labor market.
Limiting Chain Liability
In today’s flexible labor market, it is essential to limit your exposure to chain liability. As a hirer, you can reduce liability by requesting a declaration of good payment conduct from your supplier. This not only provides insight into their wage tax and VAT payments, but also offers a reliable indication of their payment behavior. Depositing part of the invoice amount into a blocked G-account is a strong method to minimize liability, as the funds are reserved specifically for tax obligations.
SNA-Certified Suppliers
Working with SNA-certified suppliers offers the possibility of complete exemption from hirer’s liability. By depositing funds into the supplier’s indemnity account, liability can be reduced to 25% of the invoice amount—or 20% if VAT has been reverse-charged. These suppliers are registered with the Stichting Normering Arbeid (SNA), making them a reliable choice for minimizing liability risks.