What is chain liability (ketenaansprakelijkheid) under Dutch law?

Dutch term: Ketenaansprakelijkheid | Legal basis: WKA + WAS + BW

Chain liability (ketenaansprakelijkheid) under Dutch law makes principals and main contractors jointly liable for the wage tax and social security contributions owed by their subcontractors and sub-subcontractors. The rules are set out in the Wet ketenaansprakelijkheid (WKA) and related legislation.

The liability applies automatically when work is contracted out: if the subcontractor fails to pay its wage tax or social security contributions, the Dutch tax authority can hold the principal or main contractor liable for the unpaid amounts. The chain of liability extends down the subcontracting chain. Principals can limit their exposure by using a blocked account (g-rekening) to which they pay a portion of the contract price, ring-fenced for tax and social security payments.

Why it matters for international businesses

For international businesses engaging Dutch subcontractors for manufacturing, logistics or service work, chain liability is an inherent risk that should be managed through g-rekening arrangements and contractual protections.