A new employee must submit in writing to his employer before he starts working the details that are relevant for wage withholding taxes. This includes name and initials, date of birth, citizen service number (CSN) or social and fiscal number, address, postal code, and place of residence and country of residence and region if the employee does not live in the Netherlands. The relevant details for the wage withholding taxes and the request involving whether or not to apply the tax rebate must be dated and signed by the employee. For this purpose, the employee can use the “Model details for wage withholding taxes” form.
If these conditions are not met, the employer runs the risk that, following an audit by the tax authorities, additional wage tax assessments will be imposed on the basis of the anonymous rate. In that case, the tax amounts to 52% of the wages.
This happened to a employer found to be an employment agency that loaned Polish employees to Dutch clients. On the first day of the audit, the tax authorities found 77 wage tax statements that did not comply with the legal requirements. With respect to these employees, wage tax statements were later submitted containing more information than originally submitted, however with respect to a substantial number of wage tax statement details were still missing.
Because the details that are relevant for wage withholding taxes were not submitted before the start of employment, the tax inspector imposed an additional tax assessment and applied the anonymous rate. And, rightfully, so ruled the Court in Breda. On the basis of the Dutch wage tax act, the employer has the obligation to require that the employee submits the details relevant for wage withholding taxes. The Dutch wage tax act furthermore states that a tax rate of 52% is applicable in case the employee does not submit his name, address or place of residence. Also, the High Court has ruled that the tax rate of 52% is applicable if the name, address or place of residence has not been provided via the wage tax statement, but has come to the employer’s knowledge in a different manner. According to the High Court, the tax rate of 52% should also be applied if the wage tax statements have been submitted, but they do not carry the employee’s signature.