Netherlands Construction Industry Tax Guide

VAT-Verlegd (Reverse Charge) in Construction — Art. 12e Wet OB

• The bouw-BTW verlegd regime: In the construction sector, the reverse charge (BTW-verlegd) applies to services provided by a subcontractor to a principal contractor (art. 12e Wet OB). The subcontractor issues an invoice without VAT and states "BTW verlegd naar de afnemer" (VAT reverse charged to the customer). The principal accounts for the VAT as both output tax (to pay) and input tax (to recover) — net effect: no cash VAT cost. The objective is to prevent VAT fraud in the construction chain (carrouselfraude).
• Scope: The reverse charge applies to: (a) construction and renovation services provided by subcontractors to principals, (b) the supply of construction workers by temp agencies (uitzendbureaus) to construction companies, (c) cleaning services on construction sites, and (d) demolition and groundworks. It does NOT apply to: (a) construction services provided directly to the end user (opdrachtgever — the building owner), (b) the supply of building materials without installation (unless the materials are installed as part of the service), and (c) services by architects, engineers, and consultants (these are standard 21% VAT).
• Principal obligation: The principal must verify that the subcontractor is VAT-registered and must report the reverse-charge VAT in the VAT return (the return has specific fields for BTW-verlegd transactions). The principal must also comply with the facturatievereisten (invoice requirements) — the subcontractor's invoice must state the subcontractor's VAT number, the principal's VAT number, and a reference to "BTW verlegd" / "reverse charge."

Ketenaansprakelijkheid in de Bouw

• The construction chain liability: The ketenaansprakelijkheid (art. 16 Wet LB, art. 34 Invorderingswet) applies specifically to the construction sector (bouw — including renovation, demolition, installation, and painting). The principal is liable for the subcontractor's unpaid loonheffingen (wage tax and social security premiums) if the subcontractor defaults. The liability extends up the entire chain — the building owner (opdrachtgever) may be liable if the main contractor defaults.
• G-rekening (G-account) defence: The principal can avoid the ketenaansprakelijkheid by requiring the subcontractor to use a G-rekening (G-account). The principal pays the subcontractor's invoice into a G-rekening — a blocked account held by a notary or bank. The G-rekening automatically withholds 35% of the payment (the estimated loonheffingen component) and the remaining 65% is released to the subcontractor. The Belastingdienst debits its share from the G-rekening when the subcontractor files its loonaangifte. Using a G-rekening is standard practice in the Dutch construction sector — principals require it for all subcontractors.
• Verklaring betalingsgedrag (payment behaviour declaration): As an alternative to the G-rekening, the subcontractor can provide a verklaring betalingsgedrag from the Belastingdienst — a statement that the subcontractor has no outstanding payroll tax debt and has filed all loonaangiften on time. The declaration is valid for 6 months. Few subcontractors have the administrative compliance to obtain this — the G-rekening is the practical standard.

Bouw-CAO and Pension Fund Contributions

• Bouw-CAO (collective agreement): The building industry collective agreement (CAO Bouw & Infra) is mandatory for all employers in the sector. Minimum wages: approximately €12–18 per hour depending on function. The CAO includes: (a) overtime and irregular hours supplements (130–150%), (b) travel time compensation (the first 30 minutes are unpaid, after that 100% of the hourly wage), (c) 25 paid holiday days per year, (d) a 13th-month bonus (8.33% of annual salary), and (e) a verplichte bedrijfstakpensioenfonds (mandatory industry pension fund).
• BpfBouw (Bedrijfstakpensioenfonds voor de Bouwnijverheid): All construction employers must register with bpfBouw and contribute to the mandatory industry pension fund. Contribution rate: approximately 25% of the pensionable salary (employer pays 2/3, employee pays 1/3). The bpfBouw also administers: (a) SVB (sociale verzekeringsbank) contributions, (b) O&O (education and development) fund contributions, (c) the bouw-verlof (building industry holiday fund — the bouw-stichting collects holiday pay). The contributions are mandatory even if the employer has its own pension plan — the bpfBouw is the default for the sector.

ZZP and Self-Employed Construction Workers

• Schijnzelfstandigheid (fake self-employment): The construction sector has a high rate of ZZP (self-employed) workers. The Belastingdienst has identified schijnzelfstandigheid as a major issue — construction ZZPs who work exclusively for one principal, use the principal's tools, work on the principal's schedule, and are integrated into the principal's organisation. Since the enforcement moratorium on the Wet DBA ended on 1 January 2025, the Belastingdienst has targeted construction ZZPs. Penalties: the principal may be assessed for back loonheffingen for up to 5 years, plus the 25% vergrijpboete if intentional.
• VAR-verklaring (verklaring arbeidsrelatie): The old VAR-verklaring (replaced by the Wet DBA and modelovereenkomsten) is no longer issued. Instead, construction workers must use a modelovereenkomst approved by the Belastingdienst for the construction sector. The modelovereenkomst must reflect the actual working relationship — the ZZP must work from results, bear economic risk (material guarantee, tool ownership, own insurance), and not be directed by the principal. The Belastingdienst's construction-sector modelovereenkomst is available on the Belastingdienst website.

Construction Investment Incentives

• EIA (Energie-investeringsaftrek): Construction companies investing in energy-saving building technologies (heat pumps, solar panels on buildings, LED lighting, insulation, triple glazing, ventilation with heat recovery, and BENG-norm (Bijna Energie neutrale Gebouwen) compliant systems) can claim 45.5% of the investment cost as an additional deduction from taxable profit. The investment must be on the EIA-lijst (EIA energy list) published annually by RVO. The EIA is in addition to normal depreciation. For a company paying 25.8% corporate tax, the EIA provides an effective subsidy of ~11.7% of the investment.
• Vamil (accelerated depreciation): Investments in environmentally friendly construction equipment (low-emission machinery, electric construction vehicles, emission-reduction systems) qualify for Vamil (willekeurige afschrijving milieu-investeringen) — 100% accelerated depreciation in the first year. Vamil applies to assets on the Milieu-lijst published by RVO. For construction companies, typical Vamil assets: (a) electric excavators, (b) low-emission concrete pumps, (c) silent demolition equipment, (d) mobile crushing plants for debris recycling.
• KIA (Kleineondernemersinvesteringsaftrek): Small construction companies (profit <€350,000) can claim the KIA — an additional deduction for investments in business assets (machinery, vehicles, tools). The KIA percentage depends on the investment amount: 28% for investments between €2,800 and ~€65,000, phasing down above that. The KIA is in addition to normal depreciation.

For VAT on construction services including the verlegd regime, see our VAT/BTW Guide →. For the chain liability and G-rekening requirements, see our Payroll Tax Guide →. For building permit and zoning tax implications, see our Property Tax Guide →.