As of 1 January 2025, the so-called enforcement moratorium imposed under the Dutch Deregulation of Assessment of Employment Relationships (Wet Deregulering Beoordeling Arbeidsrelaties) (DBA Act) will come to an end. This means that the Dutch Tax Authority (Belastingdienst) may impose corrections, additional levies and fines in cases of false self-employment. In addition, the Dutch government announced that it also wants to address the issues surrounding self-employed workers and false self-employment.
- What is false self-employment?
- What will change from January 2025?
- What are the practical implications, and
- What action can you take?
False self-employment
False self-employment occurs when the qualification of the employment relationship in practice does not correspond with to what parties have agreed upon in writing. This means that, despite the fact that parties have entered into a services agreement (overeenkomst van opdracht) in writing, the self-employed worker will be qualified as an employee. Whether this qualification applies, depends on several factors. In general, an employment relationship is more likely to exist if the worker has a dependent relationship with his contractor. This is the case, for example, if the worker has no freedom in determining when and how he carries out his work.
There are several implications when a self-employed worker is qualified as an employee. From a tax perspective, wage tax and social security contributions are due. This is will be enforced by the Dutch Tax Authority. Besides tax related implications, there will also be employment law implications. If a self-employed worker is qualified as an employee, employment law will apply to the employment relationship. As a result, the self-employed worker will be able to claim benefits as if they were an employee. Think of continued payment of wages during illness, holidays and pension.
Removal of the enforcement moratorium
What were the rules so far?
The DBA Act was introduced in 2016. The DBA Aact was created to provide clarity around employment relationships and at the same time tackling false self-employment. Instead of providing clarity, the act led to a lot of discussion. It was therefore decided that the Dutch Tax Authority would not enforce the act until further notice.
What will change from January 2025?
Despite the fact that there has been no further legal clarification, on 6 September 2024 the Dutch government reported in a letter to the Dutch parliament that the Dutch Tax Authority will actively enforce on false self-employment as of 1 January 2025. The Dutch Tax Authority will do so by imposing correction obligations, additional tax assessments and fines. These measures will have retroactive effect until 1 January 2025, unless the Dutch tax authorities suspect malicious intent. A transitional period of one year will apply, during which no penalty fines will be imposed if employers and self-employed workers are able to demonstrate that they are actively reducing false self-employment.
Employment law
In addition to the removal of the enforcement moratorium, the Dutch government also plans to introduce new legislation to address the issues on false self-employment in employment law.
In the 2023 Deliveroo-ruling, the Dutch Supreme Court developed new principles on the qualification of an employment agreement. According to the Dutch Supreme Court, whether an agreement qualifies as an employment agreement or a services agreement depends on all the circumstances of the case considered together. Read our full article on the Deliveroo ruling here.
The Dutch legislator also intends to address the issues on false self-employment in the ‘Clarification of Assessment of Employment Relationships and Legal Presumption Act’ (Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden) (VBAR Act). This legislative proposal currently lies with the Dutch State Council, waiting for advice. It is not clear in what form and when this proposal will be introduced.
How do you combat false self-employment as an employer?
If you, as an employer, are using self-employed workers, you obviously want to stay as far away from false self-employment as possible. It is therefore a good idea to identify and review the employment relationships within your organisation. One way of doing this is by using the web module of the Dutch Tax Authority. We also recommend introducing a policy specifically designed for self-employed workers.
Below we listed some key considerations for drafting such policy:
- For what period of time do you need someone? Dependency is more likely to indicate an employment relationship. If you would like to make use of self-employed workers in your organisation, try to stay away from long-term assignments with fixed hours and days. Set for example a maximum on contract extensions;
- Who decides on how the work will be carried out? Major involvement on how to perform the work is more likely to indicate an employment relationship. Therefore, make sure that self-employed workers have as much freedom as possible to decide on how to carry out their work;
- Is there an obligation for the self-employed worker to perform the work personally? A self-employed worker, as a rule, should be replaceable.
Besides these, there are many more examples. In short: do no treat self-employed workers as employees!
In need of more tips or advice? We are happy to discuss. Get in touch with us!
