Tax & Legal 10 July, 2024

Update on working with freelancers/false self-employment in the Netherlands 

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Update on working with freelancers/false self-employment in the Netherlands 

End of enforcement moratorium Dutch Tax Authorities in sight, amended bill sent to Council of State 

Many Dutch organizations/organizations working in the Netherlands struggle with the thin line between contracting with a freelancer and unintentionally entering an employment relationship under Dutch law. This tension is becoming more urgent now that the (former) Dutch Minister of Social Affairs and Employment, Van Gennip, sent an amended bill to the Council of State on June 21, 2024. Meanwhile, the Dutch Tax Authorities’ enforcement moratorium regarding this topic will end on January 1, 2025. This moratorium, which temporarily allowed more lenient enforcement on false self-employment, will be lifted before the new regulations are set to take effect on January 1, 2026. This situation forces employers to reassess their contracts with freelancers and closely monitor developments surrounding false self-employment. Want to know more? Read on or contact our employment law experts directly. 

VBAR bill 

The bill, known as the Clarification of assessment of employment relations and legal presumption bill (Verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden or “VBAR”), aims to clarify the rules surrounding employment relationships. Currently, in Netherlands, it often happens that someone contracted as a “freelancer” is legally deemed an employee. This discrepancy between contractual agreements and the actual situation can have significant consequences for both parties, especially concerning social security and employment law.

The VBAR bill introduces, in addition to the existing criteria for employee status, counter-indications for self-employment. This means that indicators suggesting self-employment will also be considered when assessing the employment relationship. A key element of the proposal is the presumption of employee status based on an hourly rate. If a worker earns less than a specified rate (rounded to €33 in the future), it is assumed they have an employment contract, unless the employer can prove otherwise. This aims to prevent workers with weak bargaining positions from being unfairly contracted as freelancers. 

New bill sent to Council of State  

On June 21, 2024, (former) Minister Van Gennip sent the amended VBAR bill to the Dutch Council of State (Raad van State). This follows a period of public consultation, during which substantial feedback was received. The Council of State will now provide advice on the proposal, after which further amendments may be made before the bill is submitted to the House of Representatives (Tweede Kamer) for further consideration. 

Future of VBAR and the enforcement moratorium – implications for employers 

The end of the Tax Authorities’ enforcement moratorium on January 1, 2025, creates a critical transition period for Dutch employers. The moratorium meant that the Tax Authorities temporarily enforced rules on false self-employment less strictly, reducing the risk of back taxes and fines for employers. With the moratorium ending, employers will again be fully responsible for correctly classifying employment relationships. This could lead to increased scrutiny and potentially require revisions of existing contracts to meet the standards. Although the new regulations will not take effect until January 1, 2026, employers must anticipate stricter enforcement now and critically evaluate their contracts with freelancers. This necessitates proactive adjustments to avoid risks and remain compliant with both current and upcoming regulations. 

Do you need support or advice in assessing and documenting current or future employment relationships under Dutch law? Our employment law specialists are here to help. Please fill out our contact form if you have any questions.

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