You have a permanent establishment in the Netherlands
If your business has a permanent establishment in the Netherlands, you have a duty to withhold taxes for employees working there.
When the provisions of a tax convention prescribe that your employee in the Netherlands must pay income tax then you are under the obligation to withhold wage tax from the wages.
When the provisions of a social security convention or regulation or national legislation prescribe that your employee falls under the social security insurance schemes of the Netherlands then you are required to withhold national insurance contributions, pay employed persons' insurance contributions and withhold or bear the cost of the contribution pursuant to the Health Care Insurance Act (Zvw) or the employer's contribution pursuant to the Health Care Insurance Act (Zvw).
What is a permanent establishment?
A permanent establishment is a business premises in the Netherlands that is equipped with sufficient facilities to operate as an independent business. The business premises are used to supply goods or services to third parties. Examples of a permanent establishment include:
- a store or other permanent sales outlet
- a workshop or factory with offices
The following business premises are not a permanent establishment:
- a warehouse
- a goods depot
- an establishment that carries out solely support activities, such as research, advertising or the provision of information
- a holiday home intended for rent