Does your company work with (sub)contractors in the construction sector, the meat processing industry, or security firms?
Be aware that this also applies if your company works with a maintenance and/or cleaning company. In that case, the withholding obligation also applies to you.
What is the withholding obligation?
Are you a client commissioning work to be carried out by a contractor? Or a contractor subcontracting work to a subcontractor? Then, before paying the invoice, you must verify whether your co-contractor has any outstanding tax or social security debts.
If there is an outstanding debt, you are required to transfer part of the invoice amount to the tax authorities or social security administration.
- For social security debts, 35% of the invoice amount (excluding VAT) must be withheld.
- For tax debts, 15% of the invoice amount (excluding VAT) must be withheld and transferred.
Sanctions
If it turns out after paying an invoice that tax or social security debts still exist, you will be held jointly and severally liable for these debts. This means you will have to pay a second time.
- For social security debts, you are liable for the total contract price (excluding VAT).
- For tax debts, you are liable for 35% of the total contract price.
Time-consuming and labor-intensive
Complying with the withholding obligation is a time-consuming task. Many companies lack the resources or personnel to monitor this effectively and, therefore, risk being held accountable for their (sub)contractors’ debts.
Onyx One
With the online qualification and registration platform Onyx One, this entire process is automated.
Does your (sub)contractor have tax or social security debts? You will be notified immediately.
This saves you time and money!