Exculpation regulation

Recipients who hire or second staff from a personnel supplier run the risk of fines or liability for payroll taxes and value-added tax (VAT) if the supplier fails to pay them. The recipient can avoid liability if it is not anyone's fault that the taxes were not paid. For example, in the case of a sudden economic downturn or exceptionally adverse weather conditions.

The recipient can in that case invoke the exculpation regulation. The exculpation regulation can only be invoked if neither the recipient nor the supplier can be held accountable.

We judge whether this situation applies on the merits of each case.

For more information, please call the Tax Information Line for non-resident tax issues.

When the recipient does not come into consideration for the exculpation regulation he may still, subject to certain conditions, make use of the indemnification of the recipient's liability by means of a g-account.