The Dutch G-account and chain liability for UK contractors
Mastering international tax compliance is crucial for businesses expanding across borders. In the Netherlands, a key focus is on understanding the G-account. Navigating these regulatory intricacies can be challenging for UK businesses entering the Dutch market. We specialize in guiding businesses through these complexities.
What is a G-account?
In the Netherlands, a G-account is established through an agreement between three parties: the supplier of labor, the bank, and the Dutch tax authority. Setting it up requires formal approval from the tax authority. Once approved, funds within a G-account are designated primarily for paying payroll taxes under Dutch law.
Purpose and function: The G-account serves as a specialized bank account for managing taxes and social security contributions for subcontractors, operated under the consent of Dutch tax authorities.
Chain liability system: According to Dutch law, main contractors may bear liability for tax and social security payments of subcontractors. The G-account allows main contractors to deposit a percentage of invoices into subcontractors’ G-account, earmarked exclusively for tax and social security payments to Dutch tax authorities. This mechanism significantly reduces main contractors’ liability for subcontractors’ tax obligations.
Key differences between the Dutch G-account and the UK CIS
Scope: While the CIS primarily applies to construction in the UK, the Dutch G-account system extends to construction, cleaning, catering, security and other sectors.
Mandatory use: CIS is compulsory in the UK, whereas Dutch G-accounts are generally required based on contract specifics.
Payment mechanism: CIS deducts payments directly to HMRC, while Dutch contractors deposit into subcontractors’ G-accounts.
Refunds/offsets: CIS allows direct refund claims, whereas the G-account system involves structured processes for refunds or offsets.
Registration: Both systems require registration, but Dutch regulations additionally mandate opening a G-account at a Dutch bank.
Urgent question? Minimize risks and maximize compliance
Whether you need guidance on G-account setup or have other questions about doing business in the Netherlands, we are here to help. Fill out the form and we will call you back the same day. We can assist you with all your business needs in the Netherlands.
What our clients say
“Before we engaged with Crowe Peak, Blu-3 faced a multitude of challenges in achieving our international growth strategies. Crowe Peak has proven to be an invaluable resource for our payroll needs, offering comprehensive solutions tailored to our requirements. We have experienced cost savings, enhanced compliance, improved reporting processes, and a clearer strategic direction. Crowe Peak’s commitment to excellence and client satisfaction is evident in the results they consistently deliver.”
– Ramnik Kapur, CFO at Blu-3
G-account assistance
- Facilitating agreement formation: We assist in creating clear agreements among payrollers, banks, and the Dutch tax authority to define roles and responsibilities.
- Streamlining approval facilitation: We simplify the approval process by formally requesting clearance from the tax authority.
- Providing implementation support: We oversee the finalization of agreements between suppliers and banks, establishing G-accounts for exclusive payroll tax payments under Dutch law.
Our services include
- Setting up a Dutch entity
- Dutch (split/shadow) payroll
- Providing tax and social security advice
- The Dutch 30% ruling
- Offering legal guidance on employment law
- Drafting Dutch employment contracts
- Managing compliance and risk
- Visa and work permit management, including Blue Cards, Intra corporate transfers, Highly skilled migrant visas, and combined permits for residence and work.
- And more.
Questions and requests
Our experts answer your inquiry within one business day