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LEGAL EAGLES


IMPORTANT INFORMATION FOR FOREIGN SUPPLIERS OF LABOUR TO THE


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inadvertently find your company paying tax and employee social security contributions in the Netherlands as well as being required to register its employment services. This also applies to employers and hirers.


DUTCH MARKET A UK company supplying labour to another company in the Netherlands whether working in the Netherlands or off-shore, may inadvertently find itself liable to be registered which may have important tax as well as other legal complications.


REGISTRATION OBLIGATION Since 1 July 2012 the registration obligation for ‘Intermediaries Providing Personnel’ Act came into force. This means that UK companies supplying personnel within the Netherlands, even if there is no local branch or permanent establishment in the Netherlands or any other legal presence, may now have to register with the appropriate Chamber of Commerce in the Netherlands.


IMPORTANCE TO SUPPLIERS OF OFFSHORE WORKERS


This is particularly important for Energy and other suppliers of off-shore workers. The regulations capture the supply of labour where the work is supervised in the Netherlands or on plant or ships governed by Dutch law or temporary placements in the Netherlands.


UK companies potentially face heavy fines if they are not registered with the Dutch Chamber of Commerce. The law also applies to hirers who will need to check that the supplier of labour is also appropriately registered.


PENALTIES


Since 1 January 2012 every employer who violates by hiring personnel from a non-registered services supplier or is not registered faces fines of 12,000 Euros per employee up to a maximum of £76,000 Euros per violation. The penalties are doubled for the second violation within 5 years and tripled for the third violation within the same period.


COMPLIANCE


The background to the new law is to prevent the illegal supply of labour and unfair competition in the labour market in the Netherlands.


It is important to assess both the agreements(s) for the supply of labour as well as your tax position to ensure that you do not


44 www.windenergynetwork.co.uk


Even where bidding for tenders or pre- qualification it is important to register now to avoid a delay in the tender process.


OTHER FACTORS


Care needs to be taken as to the registration wording used in registering with the Dutch Chamber of Commerce to avoid being obliged to pay local Dutch tax. The wording that will be required for the registration needs to be checked as the Dutch Tax Authorities are now pro- active and will seek to tax if there is any suggestion of a local presence.


Important to note also that from day one not only is there the obligation to register for the foreign agency/employer, but in addition to local tax there may well also be


Andrew Wood Consultant Solicitor www.birketts.co.uk


In addition to being registered it will also be necessary to show that the Dutch Wages Tax Act and local employment law is being complied with where appropriate.


GOVERNMENT EXPECTORATE Registrations are now being checked by the Dutch Tax Authorities, Labour Inspectorate, Immigration Authorities as well as organisations of collected employers and collective pension funds who are interested in enforcing labour agreements.


WHO WILL BE AFFECTED? • Non-Resident temporary employment and secondment agencies who supply, e.g. temporary workers off-shore in the Netherlands who arrive from Norwich via Schiphol may be caught


• Companies supplying one or more specialist workers on an ad-hoc basis to clients in the Netherlands even if only one may be caught


• Both the supplier and hirer can be affected


WHAT ACTION SHOULD BE TAKEN? • Check the requirement to register • Check that your employees meet the conditions of residency in the Netherlands


• Check that your employees have the professional qualifications required in the Netherlands


• Check that the appropriate work permits have been obtained if any of your employees are from outside the EA Switzerland or from Romania or Bulgaria.


• Check the commercial agreements for the supply of labour and any indemnity provisions, particularly in the case of hirers


requirements to withhold Dutch wages, tax and social security (compare PAYE).


LEGAL & EMPLOYMENT IMPLICATIONS There will also be legal and employment implications particularly with regard to what may be considered to be mandatory provisions such as pensions, collective pay organisation and obligations, Labour Inspectorate and Immigration who will check that the employment in the Netherlands complies with local agreements and rules.


Check other commercial arrangements that these do not fall within the requirement to register. In the case of the provision of personnel or services there should be a full agreement with indemnities for liability.


Before registration with the Chamber of Commerce check the tax, social security and employment law implications.


UK WORKERS • In the case of UK workers check the National Insurance position (see www.hmrc.gov.uk).


• Check any relevant double taxation provisions.


• Check your UK insurance covers foreign law requirements, such as Employers’ Liability insurance or health insurance and transfer of place.


• Check your contract of employment allow for mobility of work abroad and the increase of benefits payable abroad.


• Retain your records in case of mitigation of any penalties that may be enforced for failure to register.


USEFUL LINKS FOR REFERENCE www.hmrc.gov.uk www.abu.nl/flex-migrants www.government.nl/issues/work- employment-rights-and-duties/working- conditions


www.vmwtax.com


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