If you have foreign labor working for you or your company, you need to be aware of whether you are subject to the rules for labor leasing.
If you have a foreign company to perform a task for you, it can be fine as long as this company provides a complete service, organizes it themselves, and sends you an invoice for it.
But if you have hired foreign labor, and you are the employer, you risk being responsible, liable, and obligated to withhold labor market contributions and A-taxes. This can be the case, if you have hired a team of foreign craftsmen to build a garage or install a new kitchen. This obligation does not cease just because the individuals involved are the actual tax subjects. If you purchase pure labor, you may be obligated to withhold the tax.
There are a number of criteria and extensive practices for determining when labor leasing is involved (where the recipient has an obligation to withhold taxes) and when, conversely, it’s a case of simply purchasing a service from a foreign company.
Feel free to contact us if you seek guidance regarding rules and obligations related to labor leasing.