Dutch payroll tax: the G-account in the Netherlands
As competing in today’s market requires ever more flexibility, an increasing number of businesses turn to payrolling to ensure they can react quickly to market fluctuations. In some cases, skilled workers are sourced from abroad via foreign payrollers. But how can one safeguard one’s tax liability in those situations? In the Netherlands, a G-account is all you need. By using a G-account in the Netherlands, proper payment of payroll taxes is guaranteed. This helps make business dealings more transparent and ensures payroll clients are isolated from payroll tax liability. Labor and service costs are paid directly to the service provider’s account, while the associated payroll taxes are paid into the G-account in the Netherlands.
Setting up a G-account for the Netherlands
In the Netherlands, a G-account is the product of an agreement between three parties: the supplier of labor (the payroller), the bank where the account is opened and the Dutch Tax Authority. In order to set up a G-account in the Netherlands, the supplier must first formally petition the Tax Authority. If the Tax Authority deems the agreement between the supplier and the bank to be sound, the request will be granted. Once it has been set up, funds within a G-account in the Netherlands can only be used for payment of payroll taxes. This arrangement ensures taxes will always be paid in full. As such, Payroll Works’ Dutch Umbrella Company highly recommends the use of a G-account in the Netherlands.
Unfreezing a G-account in the Netherlands
In principle, the balance of your G-account in the Netherlands should remain frozen. This prevents accidental or deliberate withdrawal of funds that have been earmarked for payment of payroll taxes. However, unique situations can arise where the balance of a G-account in the Netherlands exceeds the tax liability attached to the account. In these situations, you can petition the Tax Authority to unfreeze the account. If the request is validated, you will be able to withdraw the difference from your G-account in the Netherlands. These funds can then be repurposed. Payroll Works’ Dutch Umbrella Company is highly experienced in these matters, and can answer any additional questions you might have regarding the use of a G-account in the Netherlands.