Posting employees to the Netherlands. What are the responsibilities of entrepreneurs?

What is the cross-border provision of services?

– cross-border execution of orders, in which supervision and management are carried out by a European company (for example a Polish company that produces windows sends employees to the Netherlands to assemble them – and supervises the work being done),

– cross-border posting within the group of companies (for example: delegating an employee within a bigger company),

– cross-border posting of a temporary employee (for example a logistics company sends an employee to work in a warehouse in the Netherlands).

As far as carriers are concerned – drivers engaged in cross-border road transport – they are not posted workers under the provisions of the Acts mentioned above.

Posting employees to the Netherlands – employer’s obligations

An employer who posts his employees to the Netherlands must take into account some duties. The most important is the observance and application of the minimum employment conditions introduced by Dutch law or enshrined in the universally applicable collective labour agreement. All applicable minimum employment conditions are updated by the authorities on the official website (www.government.nl).

From 1 July 2018, the Dutch minimum wage is EUR 1542.20 gross per month.

What is important, this remuneration must be paid in a non-cash form.

Before posting as well as during the posting period, the sending company must fulfil many administrative obligations, such as:

– indicate the contact person at the workplace for communication with the Dutch Inspectorate for Social Affairs and Employment (SZW),

– specific documents, including payslips, schedules of subordinates’ working hours, contracts of employment with posted employees must be available – in paper or electronic version in the workplace in the Netherlands at all times

The above-mentioned requirements constitute an informational obligation. At the request of the Dutch Inspectorate for Social Affairs and Employment, the posting company must provide all data and information that allow stating that an employer from another European country does not violate the law there.

However, the last requirement must be met by the employer before the employee commences the service:

– before the start of operations in the Netherlands, the company will have to provide information about the executed order, the persons who will perform it and the place and period of services provided to the Inspectorate for Social Affairs and Employment.

In the event of failure to comply with the informational obligation, the Inspectorate may, on behalf of the Minister for Social Affairs and Employment, impose an administrative fine of up to EUR 20,500.

Taxes

As a rule, the earnings of an employee residing in another country are subject to taxes in the country of origin, unless he works in the Netherlands. Then, income can be taxed in the Netherlands and country of origin, using the double taxation method.
The remuneration of EU employees is taxed only in the country of origin when:
– an employee resides in the Netherlands up to 183 days during each 12 months starting or ending in a tax year, and
– the remuneration is paid by the employer or on his behalf to the one who is not resident or registered in the Netherlands,
– the wage costs are not borne by the establishment or permanent establishment which the employer has in the Netherlands.

Important – for the remuneration to be subject to tax in the country of origin, the above conditions must be met jointly.