If, as an entrepreneur, you have work carried out on immovable property (construction work, electrical work, cleaning, etc.) or you use the services of a contractor or subcontractor active in the meat or security sector, you must check with every invoice you receive whether your contracting party has tax and/or social security debts. If you fail to do so, you risk being held jointly and severally liable for your contracting party's fiscal and/or social debts.
So the message is clear: check first, then pay.
In practice, however, we find that this withholding obligation is often not complied with. So we like to provide a reminder and mention that the account number of the FPS Finance recently changed.
The withholding obligation, for whom and what?
The withholding obligation applies in many sectors. These include work in real estate - such as construction, electrical engineering, cleaning and maintenance, window washers and garden contractors - and activities in the security or meat sector. Private works are fortunately still excluded. If you thus have private works performed, you do not have to worry about this withholding obligation. After all, the withholding obligation only comes into play if you use a contractor professionally. Think of companies, sole traders, liberal professions, etc.
Note that joint and several liability does not only apply to the direct contractual relationship, but to the entire chain. Suppose, for example, that BV Groente wishes to build a new supermarket and calls on contractor X to do so. Contractor X in turn subcontracts part of the work to Y. However, the latter (Y) has social debts and X forgets to comply with the withholding obligation. In that case BV Groente can be held jointly responsible for Y's debts.
How can I know if there are outstanding debts?
That's easy, through the online service 'check withholding obligation' you can check all companies from the relevant sectors. The current information from the NSSO and FPS Finance is presented in one clear screen. This makes it immediately clear whether you need to make a deduction. This analysis must be made both at the time of entering into the contract and each time you pay an invoice from the contractor.
If there is no withholding obligation, then yes you can request an attestation of consultation through the above website. This way you can prove that you have taken the necessary steps to verify the withholding obligation. Of course, this certificate is only valid for a limited time. If you pay the invoice after the stated date, you must consult the website again and perform a new check.
So how much should I withhold?
If the company has social debts, then in all cases you must forward 35% of the invoice amount directly to the NSSO.
If the company has tax debts, then the following rules apply:
- Invoice amount < 143.00 EUR (excluding VAT): 15% of the invoice amount should be retained for the FPS Finance.
- Invoice amount ≥143.00 EUR (excluding VAT): then you ask your contractor for a certificate with the amount of his debt. If you then pay within the 20 days after delivery of the attestation, there are two possibilities:
- The amount of the debt on the certificate < 15% of the amount payable (excluding VAT): you can limit the deduction to the amount appearing on the certificate.
- The amount of the debt on the certificate > 15% of the amount payable (excluding VAT): you must deduct 15% from the total invoice amount.
The amount to be withheld should be deposited in a separate account number of the FPS Finance. Please note that this number changed on Oct. 11, 2023. For the time being, payments on the old account number are still processed automatically. The correct account number can be found on the website of the FPS Finance. Payment details for social debt can also be found on the website of the NSSO.
Is that really necessary?
Checking debts, requesting certificates, withholding and transferring them... it's quite a job, but the penalties for bad students are unfortunately not negligible. If you do not comply with the withholding obligation, you can be held jointly and severally liable for the payment of tax and/or social security debts (admittedly limited to the total price of the work entrusted to the contractor). In addition, an administrative fine may be imposed equal to the amount you should have withheld and paid. This can therefore cause you to pay the invoice amount twice. Once to the NSSO / Tax Office and once as a fine.
So don't minimize the withholding obligation to a minor formality, but follow it closely. If you have additional questions, contact one of our experts (bouw@titeca.be).
