Sequential Liability Act

The Sequential Liability Act (WKa in Dutch) aims to prevent contractors and subcontractors from abusing the outsourcing of work when remitting payroll taxes. Payroll taxes include wage tax, national insurance contributions, employee insurance contributions and the income-dependent Healthcare Insurance Act contribution.

The Sequential Liability Act makes the contractor liable for the payroll taxes his subcontractor must pay in connection with (part of) the work. In turn, the subcontractor may subcontract (part of) the work subcontracted to another party. This can create a chain of (sub)contractors all involved in performing a work. The Sequential Liability Act makes each link in the chain liable for all subsequent connections.

You can read more information on the website of the Netherlands Labour Authority (formerly Inspectorate SZW) or on the website of the Chamber of Commerce.

G-account

In order to reduce the risk of liability, the subcontractor can open a blocked account (G-account). The contractor deposits into this G-account amounts corresponding to the wage taxes the subcontractor must pay for the work conducted.

You can read more information on the website of the Dutch Tax and Customs Administration.