This is contribution number 14 by KPMG Meijburg & Co regarding the identification obligation in the Netherlands and the 60% wage tax sanction on default.
As of June 1, 1994 the Act on the Identification Obligation has entered into force. This Act stipulates that in certain situations individuals should be able to identify themselves. Unlike what one might be inclined to think, this Act also has far-reaching consequences for employers, since it compels employers to establish their employees' identity on the basis of an internationally accepted passport or an European identity card if necessary supplied with a residence permit. A drivers licence is insufficient since it doesn't show the nationality of the employee.
The employer is obliged to file a copy of the identification card with the salary administration. The retention obligation does not end until 5 years after an employee has left the employer's service. There are heavy sanctions on failure to comply with this obligation. If the employer has not established the identity, he will e.g. be liable to withhold wage tax at the rate applicable to anonymous persons, which at present is equal to 60%.
The obligation refers to employees that are taken on from June 1, 1994. In respect of employees who were already employed on June 1, 1994, the employer is given 1 year to establish their identity. For new employees the identity should be established before the first working day.
Employees, when performing their activities, should always carry ID, such as a driving licence or an internationally excepted passport, if necessary supplied with a residence permit. Employees should be able to prove their identity towards the tax authorities, officials of the Industrial Insurance Administration Office or the immigration police. Unlike employers, officials are allowed to establish a person's identity on the basis of a driving licence. The employee who does not comply with this obligation risks a maximum prison sentence of three months or a maximum fine of Dfl. 5,000.
This message is most likely to be relevant for Employers and employees actually in the Netherlands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Further information can be obtained from Mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247.
As of June 1, 1994 the Act on the Identification Obligation has entered into force. This Act stipulates that in certain situations individuals should be able to identify themselves. Unlike what one might be inclined to think, this Act also has far-reaching consequences for employers, since it compels employers to establish their employees' identity on the basis of an internationally accepted passport or an European identity card if necessary supplied with a residence permit. A drivers licence is insufficient since it doesn't show the nationality of the employee.
The employer is obliged to file a copy of the identification card with the salary administration. The retention obligation does not end until 5 years after an employee has left the employer's service. There are heavy sanctions on failure to comply with this obligation. If the employer has not established the identity, he will e.g. be liable to withhold wage tax at the rate applicable to anonymous persons, which at present is equal to 60%.
The obligation refers to employees that are taken on from June 1, 1994. In respect of employees who were already employed on June 1, 1994, the employer is given 1 year to establish their identity. For new employees the identity should be established before the first working day.
Employees, when performing their activities, should always carry ID, such as a driving licence or an internationally excepted passport, if necessary supplied with a residence permit. Employees should be able to prove their identity towards the tax authorities, officials of the Industrial Insurance Administration Office or the immigration police. Unlike employers, officials are allowed to establish a person's identity on the basis of a driving licence. The employee who does not comply with this obligation risks a maximum prison sentence of three months or a maximum fine of Dfl. 5,000.
This message is most likely to be relevant for Employers and employees actually in the Netherlands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Further information can be obtained from Mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247.
