Employment, self-employment and bogus self-employment: stricter enforcement by the Dutch Tax Administration after 1 January 2025
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Dutch representatives, or other professionals coming here to work for a foreign company, often mention that their non-Dutch client suggests registering as a self-employed worker (in Dutch: zelfstandige zonder personeel or “zzp’er”), to save a lot of “fuss”. In practice, however, this construction carries major risks if the person in question is not actually self-employed. Even if they would like to work in a self-employed capacity, for example to charge a higher hourly rate, this does not guarantee that the tax authorities will share their view.
Clients with self-employed workers in the Netherlands: what will change?
In an effort to reduce bogus self-employment, the Dutch Tax Administration has announced stricter enforcement in respect of clients with self-employed workers, starting on 1 January 2025. Active enforcement was previously suspended. By all accounts, however, the number of self-employed workers is growing so fast that it is creating unfair competition and unequal terms of employment. At this time, one tenth of all workers are self-employed, even if it is uncertain whether they formally meet the criteria. If they do not, the worker might be working in disguised employment and should in fact be treated as an employee, meaning that the employer needs to include them in the payroll accounts and remit wage tax and social security contributions. Both the worker and the client may be held liable for this.
Criteria for qualifying as self-employed
For years, the criteria for qualifying as a self-employed worker have been surrounded by confusion. The Dutch Assessment of Employment Relationships (Deregulation) Act (Wet deregulering beoordeling arbeidsrelaties) was introduced in 2016. However, the authorities did not actually enforce this legislation. This is set to change on 1 January 2025. A new law is being prepared: the Dutch Assessment of Labour Relationships and Legal Presumption (Clarification) Act (Wet Verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden). Its introduction has been pushed back until 1 January 2026 at the earliest, though. No waterproof checklist has been provided to help you answer the question. Nor can any certainty be derived from using the model self-employment contracts that the Dutch Tax Administration previously issued. The truth is that the tax authorities review working relationships on the basis of actual practice, not the terms of any contract. However, existing model contracts will be allowed to remain in place until the contractual end date.
What qualifies as employment
Very broadly, by law a relationship constitutes employment if three elements are present:
- Personal labour
- Wage
- Relationship of authority
Labour and wage will generally be clear enough. In practice, however, the relationship of authority often leads to discussion. When the tax authorities reviews that relationship, they consider all the facts and circumstances, not only what the terms of the contract are.
To help you understand what factors carry weight, a recent judgment (Deliveroo) described a number of circumstances that the court found to indicate the existence of an employment contract:
- The contract is open-ended
- The worker’s remuneration is fixed
- The worker has a best-endeavours obligation, not an obligation of result
- The client determines the worker’s working hours, or else the worker works the same hours as regular staff
- The worker is invited to staff celebrations and receives the same gifts as regular staff
- The worker works on the client’s core activity and carries out their work together with others who are employees
- The client already possesses the expertise needed to carry out the work; the worker does not possess any specific expertise that the client does not
- An hourly rate of less than €32.24 plus VAT is a strong indicator of an employment contract
The risks include:
- The client might receive substantial assessments for social security contributions that were not remitted to the tax authorities (approximately 20%)
- If a worker who qualifies as an employee takes sick leave, the client is exposed to a major financial risk of having to pay two years’ wage without being insured
- If a client wishes to terminate a self-employed worker, the process is relatively simple. However, the worker could claim that they are an employee, and therefore enjoy the high level of protection that Dutch law provides against termination
- The client might have to retroactively pay pension contributions if the worker is found to be an employee
What now
The Dutch Ministry of Social Affairs and Employment has announced that it is the client and worker’s shared responsibility to decide on the appropriate form of contract, on the basis of:
- The practical work arrangements
- The specific features of a job for a self-employed worker or an employee
To help you, the Ministry has developed an aid. Click here to download it.
If your self-employed contractor is in fact an employee, or if you are a self-employed contractor actually working as an employee for a non-Dutch employer, please contact us for advice on how to set up Dutch payroll accounts for a foreign company.
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