Supply Chain Liability Clause template clause

    Updated: 27 March 2026

    Please note: these example clauses are intended as a starting point, not as legal advice. Always adapt the text to your specific situation and have important contracts reviewed by a legal professional.

    Clause text

    Article [X] - Supply Chain Liability

    1. The Supplier represents and warrants that, with respect to all employees and hired workers deployed in the performance of this Agreement, it complies with all statutory obligations regarding payroll taxes, social security contributions, and pension contributions.

    2. At the Client's first request, the Supplier shall provide the following documents:
    (a) a tax compliance certificate (verklaring betalingsgedrag) from the Tax Authority, no older than [number, e.g. 3] months;
    (b) a copy of the payroll tax return for the relevant period;
    (c) an overview of hired workers, including the hiring entity and that entity's tax compliance certificate.

    3. The Client shall be entitled to deposit [percentage, e.g. 25]% of each invoice payment into the Supplier's blocked account (G-rekening), or to pay directly to the Tax Authority, until the Supplier has provided the documents referred to in paragraph 2.

    4. If the Supplier engages subcontractors, the Supplier shall ensure that each agreement with a subcontractor contains a provision substantively equivalent to this Article. Non-compliance by a subcontractor shall be deemed a default of the Supplier.

    5. The Supplier shall indemnify the Client against all claims from the Tax Authority, the Employee Insurance Agency (UWV), and other government bodies arising from the Supplier's or its subcontractors' failure to remit payroll taxes or contributions in a timely manner.

    What does this clause mean?

    Supply chain liability (Art. 35 Invorderingswet 1990) means that you as the client can be held liable for payroll taxes and social contributions that your supplier or its subcontractors fail to remit. The Tax Authority can pursue the entire chain, from top to bottom, until the amounts owed have been paid. Note: the WKA applies to contracting of work and covers payroll taxes and contributions. For hiring of personnel, a separate regime applies (lender liability, Art. 34 Invorderingswet) which also covers VAT.

    This risk is not theoretical. According to the Hackett Group, 10 to 20% of targeted savings are lost through maverick buying, partly because parties lower in the chain fail to meet their tax obligations and the client ends up paying. The WKA makes each link in the chain jointly and severally liable.

    Paragraph 3 provides a practical protective mechanism: by depositing a percentage of each invoice into a blocked account, you reserve funds that can only be used for tax and contribution payments. Note that a deposit into the blocked account only provides protection if the amount and allocation meet the statutory requirements. This limits your financial exposure if the Tax Authority comes calling.

    When should you use this clause?

    Include a supply chain liability clause in any contract for work or labour hire where the supplier deploys workers at your location or under your direction. Particularly relevant in construction, cleaning, security, transport, and the temporary staffing industry.

    The clause also matters in cross-border hiring. According to Ironclad (2025), 92% of contract management errors are attributable to human error. Automate the verification of tax compliance certificates in your contract management system and link payment release to receiving the required documentation.

    Customize these elements

    • 1Adjust the deposit percentage to the labour-cost share of the invoice. For labour-intensive contracts (cleaning, security), 35-40% is more realistic than 25%
    • 2Add a deadline for the Supplier to provide the requested documents (e.g. 10 business days). Without a deadline, the provision lacks urgency
    • 3Consider requiring SNA certification (Stichting Normering Arbeid): supplier and subcontractors must be registered in the SNA register
    • 4Explicitly extend the indemnification to penalties and collection costs from the Tax Authority, not just the taxes owed

    Sources

    Manage all your contract deadlines automatically

    Tracking Contracts alerts you well before every notice period. No spreadsheets, no missed renewals.

    Start free month