You have a permanent establishment in the Netherlands
If your business has a permanent establishment in the Netherlands, you are the withholding agent (inhoudingsplichtig) for the employees who work in the Netherlands. As a withholding agent, you must register as an employer with the Tax Administration of the Netherlands. You can do this using the Registration form Foreign companies.
If a tax treaty determines that your employee must pay tax on their wage in the Netherlands, you must withhold wage tax (loonbelasting) from your employee’s wage.
If the European Regulation No. 883/2004, social security agreements, and national legislation determine that your employee is covered by the social security insurance schemes of the Netherlands, you must withhold national insurance contributions (premie volksverzekeringen) and pay the employed persons’ insurance contributions (premies werknemersverzekeringen). In addition, you must either withhold the employee’s contribution under the Health Care Insurance Act (Zvw) (bijdrage Zvw) from your employee’s wage or pay the employer’s contribution under the Health Care Insurance Act (werkgeversheffing 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
Please note!
Many tax treaties contain a description of what counts as a permanent establishment (vaste inrichting). This description can differ per treaty. Therefore, check the tax treaty that your country has concluded with the Netherlands to determine whether there is a permanent establishment and whether you are the withholding agent (inhoudingsplichtig) for the employees who work there for you. You can find all tax treaties in the treaty overview (verdragenoverzicht) on the website of the Dutch central government: Rijksoverheid.nl (available in Dutch only).
