Accuracy of and formal requirements for invoices

If you work abroad with third parties (such as subcontractors), make sure that correct invoices are issued. If the invoices are incorrect, you will not be able to reclaim any VAT that has been wrongly charged. To correct this, you must credit the original invoice and issue a completely new invoice. This leads to a lot of unnecessary administrative work.

In addition, the formal requirements for invoices vary by country. Be well informed about this.

VAT reverse-charge mechanism

Do you work with third parties abroad? In that case, a (mandatory) reverse-charge mechanism may apply for VAT. The correct application of the reverse-charge mechanism limits the risks for you. When applying the reverse-charge mechanism, the third party transfers the obligation to pay VAT to you as the main contractor. You then have more control over the correctness of the VAT payments and thus avoid possible unwanted surprises. Conditions are attached to the application of the reverse-charge mechanism. We are happy to advise you on the application of this mechanism.

Difference in interpretation of legislation

Much legislation on VAT stems from the European VAT Directive. Countries implement this guideline according to their own interpretation within their own laws and regulations. Therefore, there may be differences in interpretation between the different countries. So let yourself be well informed about this.

False self-employment when working with self-employed persons

Do you work with self-employed persons on projects outside the Netherlands? Then watch out for false self-employment. A pseudo self-employed person is someone who appears to be self-employed on paper, but is actually an employee. Just like the Netherlands, many countries have laws and regulations regarding false self-employment. These laws and regulations differ per country. In some countries false self-employment is presumed if the self-employed person performs the same activities as your own employees on the same project. In the case of false self-employment, additional assessments and fines may follow for social security contributions or other statutory payments. It is therefore important to look at how the employment relationship qualifies in the host country.

Permit for working with seconded employees

Seconded employees can concern a temporary worker, but also a pseudo self-employed person or a third party who uses its own employees to perform the same work as your own employees on the project. In some countries (such as Belgium and Germany) it is not permitted to perform work with seconded employees. You need a permit for this. If you do not have a permit you often receive high fines after inspection. Therefore, pay close attention to the possible existence of such laws and regulations in the host country.

Further information or advice

Would you like more information about the consequences of carrying out construction work outside the Netherlands? Please contact Anne Kin, International VAT specialist, by telephone on 013-5915125 or send Anne an email.