Foreign companies hiring out employees to the Netherlands are deemed to have at least a permanent establishment in the Netherlands for wage tax purposes. As a consequence these companies must register with the Dutch tax authorities obtain a wage tax number setup and maintain a wage or salary administration in order to comply with withholding requirements.

In order to decrease such administrative burdens for group companies, foreign companies hiring out employees to a Dutch group company, can transfer the Dutch wage tax obligations to the Dutch group company due. Based on recent changes, the foreign company and the Dutch group company must now file a joint application with the Dutch tax authorities to obtain a formal approval to transfer the wage withholding obligations to the Dutch based group company.