False self-employment of freelancers and the end of the enforcement moratorium in the Netherlands
Watch out for these red flags starting January 1, 2025
As of January 1, 2025, the enforcement moratorium on false self-employment (schijnzelfstandigheid) in the Netherlands will come to an end. This means that the Dutch Tax Authority (Belastingdienst) will intensify its scrutiny on the employment relationships of freelancers/independent contractors (zelfstandigen). This development forces organizations to proactively evaluate their employment relationships. The Assessment of Employment Relationships (Deregulation) Act (Wet Deregulering Beoordeling Arbeidsrelaties – Wet DBA) will remain in effect until new legislation, such as the Clarification of Employment Relationships and Legal Presumption Act (Wet Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden – Wet VBAR), comes into force. This new legislation is expected to provide more guidance starting in 2026. Until then, it is crucial to thoroughly assess existing employment relationships based on current legislation, which has been further clarified by several key rulings from the Dutch Supreme Court (Hoge Raad). The content of contracts, the method of collaboration, and the integration criterion (inbeddingscriterium) play a key role in this evaluation.
The “wet DBA”: Background and status
The Wet DBA was introduced in 2016 as a replacement for the previous Declaration of Employment Relationship (Verklaring Arbeidsrelatie – VAR). It serves as the basis for assessing employment relationships in the Netherlands. The act was meant to clarify when a relationship constitutes employment or self-employment. However, in practice, the Wet DBA created a lot of uncertainty for both clients (opdrachtgevers) and contractors (opdrachtnemers). To alleviate this unrest, an enforcement moratorium was put in place, meaning the Tax Authority (Belastingdienst) would limit its scrutiny of false self-employment cases until further notice. After several delays, this moratorium will now definitively end on January 1, 2025.
End of the enforcement moratorium
The end of the moratorium does not mean that the Dutch Tax Authority will immediately start with large-scale enforcement actions. Initially, the focus will be on advising and guiding employers. This provides them with the opportunity to review their contracts and employment relationships according to the legislation and, if necessary, adjust. However, this grace period will be limited. Organizations that fail to take timely action or knowingly violate the law risk enforcement measures. Over time, the Dutch Tax Authority will move to full enforcement, which may include fines and additional assessments.
The integration criterion: Crucial for assessing employment relationships
With the end of the enforcement moratorium in sight, one important topic to highlight is the so-called integration criterion. This criterion examines the extent to which the work performed by an independent contractor is integrated into the business operations of the client. Recent case law has confirmed that integration is an independent criterion in determining the classification of an employment relationship. If the activities of a freelancer/contractor (zzp’er) are closely intertwined with the core activities of the company, it suggests potential false self-employment (schijnzelfstandigheid). Organizations must be aware that even an approved model agreement may not be sufficient to prevent reclassification if the actual work performed is strongly embedded in the business structure.
Integrated/embedded or not? Five questions
The integration criterion can be tested using five core questions:
- Are the activities part of the core business of the organization? – If a contractor performs tasks that fall under the core activities of the business, this indicates strong integration.
- Do the activities have a structural nature? – Activities that are ongoing or recurring can signal that the contractor is an employee.
- Within what organizational framework are the activities performed? – Is the contractor being managed like an employee, and do they work within the organization’s structure?
- What is the importance of the activities for the business? – If the activities are essential to the primary business process, this strengthens the impression that the freelancer is embedded within the organization.
- How does the treatment of the freelancer compare to regular employees? – If the contractor is treated similarly to an employee (access to the same facilities, equal employment conditions), this indicates a close involvement with the organization.
Be cautious with model agreements
The recent developments around the integration criterion mean that model agreements (modelovereenkomsten) have become less reliable. While model agreements can provide guidance, the final assessment is based on the actual execution of the agreement. The Tax Authority has stopped assessing new model agreements, and existing approved agreements will expire after their end date. This means that organizations must closely examine whether the work is truly being performed in accordance with the agreed terms, as deviations from the agreement may have consequences for the classification of the employment relationship.
Wet VBAR: Hope for clairty
We are not there yet: Although important steps have been taken with the crystallization of the Wet DBA in case law and the lifting of the enforcement moratorium, work is ongoing on a new legal framework: the Wet VBAR. This act introduces a presumption of employment (rechtsvermoeden van werknemerschap) for freelancers earning less than approximately €33 per hour. In such cases, the relationship is presumed to be an employment relationship unless the client can prove otherwise. Note: this law and the presumption of employment based on a minimum hourly rate are not yet in force. It is expected that this law will take effect in 2026 and will provide more clarity for both clients and contractors. Until then, the Wet DBA remains the leading legislation. However, organizations are advised to start preparing for the Wet VBAR and align their freelance policies accordingly.
Red flags for false self-employment: What to watch out for starting January 1, 2025
With the resumption of enforcement on false self-employment, there are several red flags that clients should be aware of:
Core activities: Freelancers performing tasks that fall under the core activities of the business.
Long-term engagements: Contractors who have been with the company for an extended period or are hired for an indefinite duration.
Structural integration: Freelancers working within fixed structures and processes of the client.
Equal treatment: Freelancers receiving the same facilities and employment conditions as regular employees.
No Freedom in execution: Contractors with little or no autonomy in carrying out the assignment.
No freedom of substitution: Freelancers who cannot be substituted by another person, even though this is contractually agreed.
False self-employment and the enforcement moratorium: Key dates to keep in mind
- January 1, 2025: End of the enforcement moratorium, resumption of regular enforcement on false self-employment.
- January 1, 2026: Expected implementation date of the Wet VBAR.
- June 1, 2026: Final expiration date for the model agreement “no employer authority” (geen werkgeversgezag).
It is crucial that organizations actively review and, if necessary, adjust employment relationships in the lead-up to the resumption of enforcement on false self-employment starting January 1, 2025. As stated in a recent parliamentary letter, the Dutch Tax Authority will not impose fines on organizations in the first year if they can demonstrate that they have taken concrete steps to prevent false self-employment. This means it is now essential to build a robust dossier that shows the actions your organization has taken to comply with current legislation.
Creating such a dossier not only helps avoid potential fines but also provides a clear overview of the measures taken to comply with the regulations. Ensure that the dossier includes clear documentation on the evaluation of existing employment relationships, adjustments to agreements, and any communication with contractors about the changes. This dossier can serve as proof of active compliance with the guidelines.
Need to discuss? Get in touch!
The end of the enforcement moratorium means organizations need to reassess their employment relationships to avoid fines and additional assessments. To be well-prepared for more intensive inspections by the Dutch Tax Authority, it is essential to evaluate your organization’s current situation. Our specialized legal advisors can assist by conducting a false self-employment scan.
With this scan, we map out the organizational structure, work culture, and existing agreements in detail. We analyze agreements and how they are being executed in practice between clients and contractors. Based on these insights, we provide a risk assessment and develop a customized action plan. This not only helps ensure compliance with current legislation but also prepares your organization for future changes, such as the implementation of the Wet VBAR. Want to be certain your organization is compliant and not at risk of sanctions? Contact us.
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