It has recently been announced that the current G-accounts system will definitely not be replaced by a deposit system. Although the deposit system had been introduced by law on July 1, 2009, the Dutch Tax and Customs Administration had repeatedly postponed its implementation. The decision to call a halt to the development of the deposit system is in line with the basic assumptions of the Broad Agenda (Brede Agenda) of the Deputy Minister of Finance, which states that the Dutch Tax and Customs Administration must revert to its key tasks as much as possible.

The deposit system

Under the deposit system, the Dutch Tax and Customs Administration would hold deposits (accounts) in its name at banks. To indemnify themselves against the risk of recipients and vicarious liability, recipients (inleners), or contractors and principals, would be able to deposit sums into sub-accounts of this deposit account. The beneficiary of the deposit account (the agency supplying the staff/subcontractor) would then be able to use the balance of these sub-accounts to pay payroll tax and social security contributions and VAT.

G-accounts will remain in place

This announcement means that the current system of G-accounts will continue. Under this system, the agency supplying staff/subcontractor holds a G-account in its own name at a bank on the basis of a three-party agreement between the agency/subcontractor, the bank and the Dutch Tax and Customs Administration. Recipients, contractors and principals can deposit sums into these G-accounts to indemnify themselves against their recipients or vicarious liability in respect of the payroll tax and social security contributions or VAT that was not paid by the agency supplying the staff/subcontractor. This approach will be continued but will be made more ‘future-proof’, according to the Dutch Tax and Customs Administration. The possibility of direct deposits instead of deposits to a G-account, an alternative approach that was being used by the Dutch Tax and Customs Administration, will be canceled. The bill to implement a mandatory G-account for non-certified temporary employment agencies will, in the meantime, not take effect. Finally, the possibility of expanding the G-account to allow self-employed individuals to open such an account will not be looked into any further.

It is still unclear as of which date the possibility of direct deposits will be canceled and what the future-proof measures for G-accounts will entail.

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