06 March 2023 Add expertise tag Add service tag Add country tag
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This publication explains the so-called Hirer's Liability regime for Dutch payroll taxes upon seconding employees in The Netherlands (inlenersaansprakelijkheid). 


In the Netherlands, a special regulation applies when working with employees who are hired from a third party, such as for instance (but not exclusively) a staffing agency. Below, we will discuss this regulation, which is called the "Hirer's liability scheme", or in Dutch de "Inlenersaansprakelijkheid". 



 What is Hirer's liability?

Any company in the Netherlands that hires staff from third parties can, under certain conditions, be held liable by the tax authorities for unpaid payroll taxes and VAT that this third party became due in connection with the provision of such staff (Hirer’s liability).

The regime of the Hirer’s liability aims to prevent abuse with the payment of payroll taxes and VAT by hirers and lenders of staff.

The provisions of the Hirer's liability are set out in Article 34 of the Collection Act 1990, in the Hiring, Supply Chain, and Client Liability Implementation Regulation 2004, and in Article 34 of the Collection Guidelines 2008.

The parties relevant to Hirer's liability are the:

  •  The hirer
  • The lender
  • The on-lender

The technical definition of each party follows below.

Who is a “hirer”?

A hirer is any entrepreneur who hires an employee from another entrepreneur and is in charge of supervising the hired employee, while that employee remains employed by the other entrepreneur, the lender.

If the lender retains control and supervision over the employee, there will generally in technical terms be no "hiring”, but rather contracting work. The Hirer's liability does not apply to such a situation, but depending on the circumstances, the Chain Liability rules may apply. More about this in our publication “Liability for payroll taxes in case of contracting or sub-contracting (Chain Liability).

Who is a “lender”?

An entrepreneur who “lends” (dispatches/ assigns) an employee to another entrepreneur for this employee to work under the management or supervision of this other entrepreneur is a “lender”. The employee remains in employment by the lender.

In principle, every lender is obliged to register as such in the Trade Register of the Chamber of Commerce; the so-called WAADI registration (Act on the allocation of labor by intermediaries). This registration is open to the public and can thus be consulted by anyone at the Chamber of Commerce.

Who is an “on-lender”?

An on-lender is an intermediary for the hiring of staff: the on-lender “borrows” staff from the lender and “lends” it to the Hirer.

To which taxes and premiums do the Hirer's liability apply?

The Hirer's liability applies in the first place to the payroll taxes which the lender withheld from the salaries of the hired staff and which the lender became due on this account, and which the employer had to pay to the Dutch tax authorities, but which it did not.

The payroll taxes consist of:

  • wage tax
  • national insurance contributions
  • employee insurance premiums
  • income-related contribution under the Healthcare Insurance Act

In addition, the Hirer's liability applies to the VAT (in Dutch “BTW”) which the lender charged to the hirer (or the on-lender) for the hiring of staff and which the lender had to pay to the tax office, but which it did not. 

When is the hirer liable for collection interest and costs?

The Dutch tax authorities can hold the hirer liable for the collection of interest and costs of the assessed wage tax and VAT if the interest and costs are due by the hirer himself, for example, if the hirer has paid the lender too late. In addition, the tax authorities may charge collection interest and costs if the hirer pays its tax debt too late.

Who is liable for whom?

The hirer is liable for the wage tax and VAT owed by the lender about staff provided to the hirer. In the following situations, more parties can be held liable simultaneously:

• the staff is hired through an on-lender

• the staff is hired by a subcontractor (Chain Liability)

When on-lending staff, more people are liable for the same debt. The Dutch tax authorities first hold the on-lender (s) liable, and then the final hirer.

If it is immediately clear that the on-lender (s) cannot pay the debt, the Dutch tax authorities can simultaneously hold the on-lender (s) and the final hirer liable. This also applies to any subcontractor and main contractor.

Objection against the Hirer's liability

If the payroll tax and/or VAT are not paid by the lender / on-lender, the Dutch tax authorities will send a written notification (decree) to the hirer in which the hirer is held liable for the unpaid payroll tax and VAT assessed. The hirer can file an objection against this decree. This must be done within six (6) weeks of the date of the decree.

The hirer can request information about the assessment for which it is being held liable. This can be done via the competent Tax Collector who issued the formal notification in the first place.

If the objection is rejected, the hirer can appeal against that decision to the competent tax court.

Special situations with consequences for the Hirer's liability

Special rules apply to the following situations:

  • Directors – substantial shareholders (in Dutch “DGA’s”)
  • Foreign-based hirers
  • Foreign-based lenders
  • Hiring from a foreign lender
  • Transport contracts and the leasing/rental of manned equipment
  • Debt restructuring scheme or bankruptcy

 Directors – substantial shareholders (in Dutch “DGA’s”)

A lender can be a legal person (like a BV) with only one employee, like the director/substantial shareholder (DGA).

If the lender (BV)  does not pay the payroll taxes and VAT for the DGA, then the DGA itself can be held liable as a director of the lender if there is manifestly improper management (director's liability). In addition, the tax authorities can also hold the hirer liable for the unpaid amount (Hirer's liability).

Foreign hirer

The Hirer's liability can also apply to a hirer established abroad who has work performed in the Netherlands for which staff was hired from a hirer who had to withhold and pay Dutch wage taxes and Dutch VAT.

On the other hand, the Hirer's liability in principle does not apply to a hirer established in the Netherlands who hires staff for work to be performed abroad in respect of which no Dutch payroll tax and VAT becomes due and payable.

Foreign lenders

A lender established abroad which lends staff in the Netherlands to perform work in the Netherlands must, in principle, withhold and pay Dutch wage tax and Dutch VAT if and to the extent the hired staff meets the conditions for Dutch tax liability and Dutch social security coverage. The Hirer’s liability can apply accordingly.

Hiring from a foreign lender

The hirer's liability can also apply to a hirer established in the Netherlands who has work carried out in the Netherlands for which staff is hired from a lender based abroad but who has to withhold and pay Dutch wage taxes and Dutch VAT on account of the lent staff.

Transport contracts and the leasing/ rental of manned equipment

The service recipient in a transportation agreement, including the rent of manned equipment, can also be held liable, based on the Hirer's liability, for the unpaid Dutch wage tax and Dutch VAT of the service provider (Lender/ lessor), provided that the activities connected with the transport are supervised or managed by the service recipient (Hirer/tenant/lessee).

Private debt restructuring scheme or bankruptcy

If a lender (or on-lender) of staff loses control over its assets, for example, due to the implementation of the statutory debt restructuring scheme or bankruptcy, a hirer can no longer protect itself from the Hirer’s liability by depositing into the G-account of the lender (or on-lender). With the use of a G-account in this situation, no lien (pledge of the funds deposited) for the tax authorities is established, as a result of which the amounts deposited in this account fall into the estate of the lender (or on-lender). As a result, such a deposit does not protect the hirer from the Hirer’s liability.

Protection against Hirer’s liability

A hirer (or on-lender) of staff can take the following measures to limit the risk of liability for wage tax and VAT due by the lender of staff:

  • request an up-to-date and original “tax payment behavior declaration” (in Dutch: “Verklaring betalingsgedrag”) from the lender
  • keep a good administration
  • deposit into a blocked account of the lender (G-account)

Direct deposit with the tax authorities to avoid the Hirer’s liability is generally no longer possible (albeit this can possibly be negotiated with the tax office under specific circumstances).

The declaration tax payment behavior for the Chain liability and the Hirer’s liability

At the request of the lender / on-lender, the tax authorities can issue a written declaration (Verklaring betalingsgedrag) confirming that the lender has paid its payroll taxes and VAT debts owed up to the date of the declaration (statement of payment behavior for chain and hirer's liability).

This declaration does not protect against the Hirer’s liability as such, but it does give the hirer insight into the tax payment behavior of the lender and thus a better picture of the effective liability risk.

The Dutch tax authorities can issue two types of payment behavior declarations: a so-called "clean declaration" or a "conditional declaration".

The lender can only receive a clean declaration if the reported and/or assessed wage tax and VAT have indeed been paid or if sufficient security has been provided for the payment thereof.

The lender can receive a “conditional declaration” if not all amounts owed in wage tax and turnover tax have been paid because a payment arrangement has been made due to temporary liquidity problems and that arrangement has also been complied with, or if an extension for payment has been granted for objection or (higher) appeal.

A new lender who has not yet had to pay wage tax and VAT cannot obtain a payment behavior declaration.

A self-employed person without staff (self-employed, or “ZZP”) who on-lends staff can only receive a declaration of payment behavior for VAT.

If the business of a lender is continued by a trustee or administrator, in principle no payment behavior statement can no longer be obtained unless this continuation lasts longer and the trustee or administrator has shown good payment behavior.

The lender can request a written declaration of his tax payment behavior from their tax office. The issuance of the declaration should under normal circumstances take approximately one week after receiving the request.

Good administration; avoidance of the anonymous rate

The (wage and VAT) liability of the lender on account of lending staff is usually determined based on the lender's administration and, if necessary, the hirer's administration.

If there is no proper administration, as a result of which the tax authorities cannot determine the exact wage amount, the tax authorities can make a reasonable estimate of the wage amount and the payroll taxes due.

The lack of a proper administration of the lender may be a reason to determine wage tax and national insurance contributions with the application of the so-called anonymous rate, which is the highest rate for payroll taxes applied (49.50% in 2020).

The anonymous rate must be applied, for example, if:

  •  the details of the employee(s) are not fully included in the payroll administration of the lender
  • the identity of the employee(s) has not been properly established
  • No documents (proving that employees can work in the Netherlands) are submitted

The lender can request a reduction of the tax based on the anonymous rate with the submission of data that the tax authorities can use to determine the wage of the employee, and which can be used to prove the identity of the hired employee.

The identity of the employee can be proven with the following data:

  • name, address, and city details
  • the date of birth
  • the Dutch tax registration number (BSN)
  • a specification of the hours worked
  • the nationality
  • the type of identity document (usually a passport), the number, and the period of validity
  • if applicable: the presence and unique characteristics of an A1 statement, residence permit, work permit, or notification
  • name, address, and place of residence of the lender and the registration number of the lender at the Chamber of Commerce

Under the General Data Protection Regulation, the lender may not request a copy of the proof of identity for this purpose. It is sufficient to view the proof of identity and to write down the relevant data from it.

A driver's license cannot be used for this identification, because the nationality of the employee is not stated on it. Based on other legislation (for example the Aliens Employment Act or the Wage Tax Act 1964) it may be required to request and keep a copy of the proof of identity (usually the passport).

The data must be recorded. For this, the hirer can use an overview of employees provided by the lender, supplemented with their Dutch tax registration number (BSN).  This recording must take place or must have taken place at the time the employee starts to work.

The hirer's administration must also include an adequate procedure for:

  • identification of the hired employee
  • verification of proof of identity
  • recording of personal data

The recording of personal data must be preceded by the identification of the person and the verification of the identity document. This can be done by checking the original proof of identity for validity and authenticity. Among other things, the Guidelines for identification and verification of Dutch Data Protection Authority provide guidelines for this verification.

After this check, the personal data must be recorded and made inaccessible to unauthorized persons.

Appeal to the disculpation provision

In certain situations, the hirer's liability does not apply because no one can be blamed for the wage tax and VAT not being paid by the lender, for example, if this occurs as a consequence of a sudden deteriorating economic situation.

The hirer can then rely on the so-called "general disculpation provision". Appealing to the disculpation provision is only successful if, in addition to the hirer, the lender cannot be blamed (force majeur). Whether this is the case must be assessed based on the facts and circumstances of the case.

If a lender is included in the register of the Labor Standards Foundation (SNA), the hirer can under certain conditions be indemnified and thus avoid the hirer’s liability. See further below: "Indemnification for the full amount of the Hirer’s liability"

The blocked account (G-account) to prevent the hirer's liability

A hirer can limit the risk of liability based on the hirer's liability by depositing part of the invoice amount into a blocked account of the lender, the so-called G-account (or in Dutch “G-rekening”).

The functioning of the G-account can be explained as follows:

  • The functioning of the G-account
  • The use of the G-account
  • Conditions for indemnity upon deposit into the G-account
  • Indemnity for the full amount of liability
  • The indemnification of payments to qualified listed private employment agencies
  • The application for the G-account
  • The G-account agreement
  • Opening a G-account with the bank
  • Changing the G-account agreement
  • The correct amount to be deposited on the G-account
  • Transferring the G-account to the tax authorities
  • Unblocking the G-account
  • Closing the G-account
  • Change of legal form - end of the G-account
  • Unilateral cancellation of the G-account
  • Incorrect use of the G-account

 The functioning of the G-account

A hirer can limit the risk of liability based on the hirer's liability by depositing part of the invoice amount into a blocked account of the lender, the so-called G-account.

The funds received on a G-account can only be used by the lender for paying the payroll taxes and VAT or for transferring funds to the G-account of another involved party.

Contractors and subcontractors can also use a G-account to prevent liability for payroll taxes when contracting or subcontracting (Chain Liability).

The use of a G-account is not mandatory.

The hirer is only protected against the hirer’s liability when deposited into a G-account, but the indemnity only applies up to the amount deposited. It is therefore important for the hirer to determine the correct amount of payroll taxes and VAT payable by the lender.

The hirer transfers a pre-agreed part of the invoice amount to the G-account of the lender. The lender can pay the payroll taxes and VAT due from the G-account directly to the bank account of the tax office. If all conditions are met (see further: “Conditions for indemnification in case of payment into the G-account”), the hirer can then not be held liable based on the hirer's liability. If the lender’s debt is higher than the transfer of the hirer to the G-account, the hirer can still be held liable for the remaining amount.

It is no longer possible to deposit directly into the bank account of the Dutch tax authorities. 

The use of the G account

The following parties can use the G-account:

  • the lender,
  • the on-lender,  
  • the hirer

The hirer receives an invoice from the lender/on-lender. The hirer agrees with the lender/on-lender that part of the invoice amount will be transferred to the G-account.

With the payment order for the transfer to the G-account, the hirer states:

  • the number of the lender's invoice
  • any other identifying features of the invoice

The lender can then pay the payroll taxes and VAT from the G-account.

The on-lender can also (continue to) transfer amounts from his own G-account to the G-account of the lender. These amounts must be preordained to pay the payroll taxes and VAT on the invoice. The on-lender can also pay the VAT owed from his own G-account.

Conditions for indemnification in the event of payment to the G-account

  • The amount the hirer pays into the G-account of the lender only protects the hirer against the hirer’s liability if all of the following conditions are met:
  • The lender's invoice should meet the VAT invoicing requirements (Article 35a of the VAT Act 1968).
    In addition, the invoice must contain the following information:
    ● the number or character of the agreement with which the lender has lent staff
  • ● the period in which the work or works were performed
  • ● a description or characteristic of the work for which payment is made
  • The invoice data should be easy to find in the hirer's administration.
  • The hirer must maintain a man-hour administration with which the tax authorities can determine (the extent of) the liability for the work.

Only if the hirer meets all the above-mentioned conditions, the hirer is not liable up to the amount that the hirer has deposited into the G-account of the lender (or on-lender). The indemnity also applies if the amount deposited did not ultimately end up with the tax authorities unless the hirer knew or could reasonably have suspected that the lender (or on-lender) would not use the amount deposited in the G-account (for whatever reason) for paying the payroll tax and VAT due.

Indemnification for the full amount of the liability

The tax authorities do not hold a hirer liable if the lender meets the following conditions:

  1. The lender's company complies with the NEN 4400-1 or the NEN 4400-2 standard and is included in the register of the Labor Standards Foundation (SNA). Temporary employment agencies that meet these requirements are listed on the SNA website.
  2. The lender's invoice states:
  •  the number or reference of the agreement to which the invoice applies
  •  the period or periods to which the invoice applies
  • the description or characteristic of the work to which the invoice applies

The hirer must also meet the following conditions:

  • the hirer pays -at least- 25% of the invoice amount (including VAT) to the G-account of the lender (if the VAT is shifted, this is 20% of the invoice amount).
  • the hirer has stated the invoice number and any other identification details of the invoice upon payment.
  • the hirer's administration provides direct insight into the details of the personnel hiring, the man-hours administration, and the payments.
  • the hirer can prove the identity of the hired employee.
  • the hirer can, if applicable, demonstrate that the hired employee has a valid residence and/or work permit.

The hirer should formally verify the SNA registration with every payment because it is always a snapshot. It is therefore advisable to subscribe to the notification service of the SNA. A notification will be sent if there are changes in the SNA registration of the relevant lender.

The indemnification of payments to qualified listed private employment agencies

Several temporary employment agencies listed in OECD countries active in the Netherlands and whose members comply with the NEN 4400-1 or NEN 4400-2 certification can, as an alternative to depositing into the G-account, provide security for payment of the payroll taxes and VAT.

If these listed temporary employment agencies have provided the required security with the tax authorities, the tax authorities issue a decree, confirming that payments to the operating companies that are part of the relevant listed private employment agency, depositing in the G-account is in principle not required.

If the hirer wants to determine whether this exception applies, the hire should verify the following:

  • the temporary employment agency whose workforce is hired has the aforementioned decree from the tax authorities, and
  • the operating company from which the company hires personnel is included in the SNA register.

If these conditions are met, in principle the condition does not apply that the hirer must deposit 25% or 20% (when applying the reverse charge scheme for VAT) of the invoice amount to the G-account to be protected against the hirer’s liability. The hirer can transfer the entire invoice amount to the private employment agency without the risk of liability if at least the other conditions for indemnification are met (see above: "Indemnification for the full amount of liability").

The application for the G-account

To open a G-account, the entrepreneur (lender or on-lender) must submit a written request to the tax authorities (standard application form). If this request is granted, the tax authorities will conclude a so-called G-account agreement with the bank.

After receiving the application, the tax authorities assess whether the applicant is eligible for a G-account.

To be eligible for a G-account, the applicant must exclusively or almost exclusively deal with lending staff for remuneration and be liable for the withholding of payroll taxes.

An on-lender that does not have the obligation to withhold payroll taxes can apply for a G-account based on its VAT number.

The tax authorities do not cooperate in the creation of a G-account if:

  • the applicant does not meet the conditions outlined above, or
  • the applicant already has a G-account, or
  • the tax authorities expect that the applicant will use the G-account incorrectly.

In the event of a rejection of the application, the tax authorities must inform the applicant in writing within a reasonable period, stating the reason for the rejection.

The G-account agreement

The G-account is always linked to a wage tax number and one or more VAT numbers. It is possible to link more than one sub-number to the G-account.

In the G-account agreement, the parties involved include several standard provisions, which aim to achieve that:

  • The balance of the G-account may only be used to pay wage tax and VAT in connection with the hiring of staff or to transfer it to another G-account in connection with hiring staff.
  • The tax authorities obtain a lien (pledge or “pandrecht”) on the balance of the G-account, which implies that the tax authorities are allowed to use the balance of the G-account for the payment of the wage tax and VAT debt owed by the lender if the lender does not pay this debt.

Opening a G-account at the bank

If the tax authorities agree to the application for a G-account, the applicant will receive a G-account agreement signed on behalf of the tax authorities.

The applicant must go to the bank within one month with this agreement with the request to open a G-account. If the bank agrees, the bank will also sign the agreement and assign a G-account number. After issuance of the G-account, the bank returns the signed copy of the agreement from the tax authorities to the tax authorities. The bank will keep the original copy of the agreement for as long as the G-account remains intact, but in any case for seven years.

Changing the G-account agreement

An G-account agreement is linked to the sub-numbers to which this agreement applies. If changes occur in the link to the sub-numbers, in the name, or in the business activities, the tax authorities must be informed as soon as possible (standard mutation form).

The correct amount to be deposited into G-account

The hirer may decide for himself which part of the invoice is paid into the G-account of the lender and it is advisable to determine this amount as accurately as possible. If too little is deposited, the risk of liability for the deficit remains, and if too much is deposited then the lender cannot access these  (unnecessarily blocked) funds. For this, the lender must first request unblocking (see also “Unblock the G account”)

The exact amount of the deposit is usually agreed upon in advance between the lender and hirer. This is a matter of negotiation between the parties, where a reasonable estimate of the amounts owed by the lender in terms of wage tax and VAT should be the starting.

Transfer from the G-account to the tax authorities

For transferring payments to the tax authorities from the G-account, the payment order should contain the payment reference that is stated on the invitation to file a tax return make or which belongs to the payment instructions of a tax assessment.

Unblock the G-account

If at some point the balance of the G-account becomes higher than the payroll taxes and VAT due for which the amounts have been paid into the G-account, the lender can file a request to the tax authorities to release this surplus (standard form).

The tax authorities assess the lender's filing behavior and the nature of the amounts deposited to determine whether there is a surplus. If the unblocking request is approved, the first settlement with other tax debts of the lender follows. Any remainder will be paid into the lender's "normal" bank account after the tax authorities have received this amount from the bank.

Closing the G-account

The G-account agreement must be terminated upon termination of an enterprise. A written request must be submitted for this (standard form). If the G-account has a balance on termination, this balance will in principle be unblocked (under the normal conditions for unblocking).

During the term of a Decree broad moratorium (BBM) pronounced by the court, a request for termination of the G-account agreement will not be rewarded. This is related to the enforcement of the pledge. A new termination request can be made after the term of the BBM expired.

Change of legal form - end of G-account

The G-account agreement must be terminated if the legal form of the company changes. A new entity must apply for a new G-account in the name of this new entity. It is therefore in principle not possible to transfer the G-account agreement to the new entity if the legal form changes.

Unilateral cancellation of the G-account by the tax authorities

The tax authorities can unilaterally cancel a G-account agreement if:

  • there is no incorrect use of the G-account
  • the main activity of the company changes so that the company is no longer primarily involved in lending staff
  • the lender no longer has employees
  • the lender has been declared bankrupt
  • the lender has been granted a moratorium on payments and the administrator (curator) does not agree with the continuation of the G-account
  • the debt protection scheme for natural persons applies to the lender

No objection or (higher) appeal is possible against the unilateral termination of the G-account agreement. It is, however, possible to have this decision reviewed by the civil court.

Incorrect use of the G-account

If funds are received on the G-account from another G-account that is not intended for the payment of payroll taxes and/or VAT due in connection with the lending of personnel, these amounts should immediately be repaid to the G-account from which these funds come from. Otherwise, the G-account will be used incorrectly. The tax authorities can use various measures to prevent or stop this incorrect use, including

  • unilaterally canceling the G-account of both parties.
  • claiming damages in civil court
  • the initiation of criminal prosecution

Our services about the hirer's liability

We work daily with clients who are dealing with hirer's liability, hirers, on-lenders, and lenders.

Among other things, we offer the following services in relation thereto:

  • taking care of the payroll and fulfilling the related administrative obligations
  • advice on the scope of the hirer's liability in a specific case and the best strategy for dealing with this risk under the given circumstances
  • requesting a declaration of payment behavior from the tax authorities
  • requesting the G-account agreement on behalf of the client, changing it, or terminating it
  • determining and substantiating the actual amounts due of payroll tax and VAT owed in connection with the hiring of staff
  • objecting on behalf of the client to a decision of the tax authorities regarding the hirer's liability.
  • support negotiation between the parties about the conditions for indemnity from the hirer's liability; specifically the size of the amounts to be deposited into the G account.
  • submitting a request for unblocking of the G-account (refund of the remaining balance) to the tax authorities and, if necessary, consultation with the tax authorities.

If you would like more information or if you are interested in our services, we invite you to contact us by calling 020-5709440 (Amsterdam) or 010-2010466 (Rotterdam).

You can also fill in the contact form on our website, or send an e-mail directly to info@taxci.nl.

We are happy to make time for you!