Does your contractor have debts with the RSZ or the tax authorities?

Does your contractor have debts with the RSZ or the tax authorities?

Companies and self-employed persons who call on a contractor for construction work must check whether the contractor concerned has no debts with the social security or tax authorities. If such is the case, there is a withholding obligation. You can easily check whether such a deduction is necessary via the link ww.checkinhoudingsplicht.be.

You and your contractor

You are obliged to check whether your contractor has debts with the social security or the tax authorities, if you have one of the following activities performed:

work on immovable property (with the exception of certain agriculture, horticulture and forestry activities)

the supply of ready-mixed concrete

certain security or surveillance services (art. 30ter of the law of June 27, 1969 – Royal Decree of July 17, 2013), and

activities in the meat business.

“You” are in that case a company or a self-employed person. Private individuals who have work carried out on immovable property that is only used for private purposes have no withholding obligation.

Withholding obligation

In fact, there are two separate schemes… One for tax debts and one for social security debts. If you determine that your contractor has debts with the tax authorities (which can be both tax and non-tax debts), you must withhold 15% of the invoice amount to be paid (excluding VAT). You must transfer this amount to the tax authorities.

In case there are social security debts, you must additionally transfer 35% to the National Social Security Office.

Check your withholding obligation

How do you know if your contractor is in debt? The tax authorities and the National Social Security Office have joined forces for this. On the website www.checkinhoudingsplicht.be you can check whether there are any debts based on the contractor's company number.

If there are no debts - you get a green screen - you can download a certificate of consultation of the withholding obligation. The validity of such certificate is limited to the date stated on it (in principle, until the last Thursday of the month). If you pay the invoice on that date at the latest, you do not have to withhold anything. If you only pay the invoice later, you will have to consult the website again.

However, if you get a red screen on the fiscal or social security section, or on both, you should withhold. As mentioned, in that case you must transfer 35% of the invoice amount (excl. VAT) if there are social security debts. If there are tax debts, you must transfer 15% of the amount to be paid (excluding VAT).

We have to add a nuance to the tax debts: if you still want to pay on the day of the consultation, there are two options:

If the invoice amount is lower than 7.143 (excluding VAT), you should withhold 15%.

If the invoice amount equals or is higher than 7.143, the contractor can request a certificate stating the amount of his debt.

If you pay during the 20 days that this certificate is valid, and the amount of the debt on the certificate is less than 15% of the amount to be paid (excluding VAT), you may limit the withholding to the amount that appears on the certificate. If it is higher, you should withhold 15%.

Sanctions

To 'encourage' you to comply with this withholding obligation, there are also sanctions, and they are quite tough. If you don't make the deduction, you risk:

an administrative fine equal to double the amount that should have been withheld and transferred;

joint and several liability for the payment of the contractor's tax and non-tax debts up to 100% of the invoice amount.

Although the obligation to withhold for the contractor's tax and social debts has been around for a long time, it seems necessary to continue to warn against the consequences of an incomplete administration. If you have paid a contractor with social and tax debts 100% of the invoice amount, you risk a fine of twice 15% + 35% of that invoice amount. In addition, you have the risk of having to pay the contractor's debts amounting to 100% of the invoice.