In light of the developments in the field of self-employment, we will keep you posted regularly through our Self-Employment Update. In this Self-Employment Update we will update you on developments, the impact on your organisation, and the actions you should take.
At present, the Dutch Tax Administration is not actively enforcing the law on false self-employment. False self-employment exists where work is performed under an agreement for services, which is in fact an employment agreement. It was recently announced that the enforcement suspension will cease permanently on 1 January 2025. In this article, we will describe the shape enforcement will take and what steps clients should take to prepare themselves.
Improving balance on the labour market along three lines
Law enforcement by the Tax Administration is part of a broader package of measures aimed at restoring the balance on the labour market. The three lines on which the government focuses are the following:
- Creating a more level playing field between forms of contract.
- Increasing clarity on the question when a person is working as an employee or as a self-employed person.
- Improving law enforcement on false self-employment.
The first line involves, for example, the step-by-step decrease of the self-employed person’s deduction and the intention to introduce a mandatory disability insurance for sole traders.
In the context of the second line, a new act is being prepared (that we wrote about earlier) containing a review framework based on existing rules and case law, with which it can be determined whether an employment agreement exists. In addition, this proposal contains a legal presumption of an employment agreement if a person works for a maximum hourly rate of €33. This new employment legislation is expected to enter into effect on 1 January 2026.
The third line, of fiscal enforcement, will not wait for this and will already take effect on 1 January 2025. We would like to explain what this means.
Way of lifting the enforcement suspension
Law enforcement by the Tax Administration as of 1 January 2025 means that ‘the ordinary rules’ for imposing correction obligations, retrospective levies, and fines will be followed. This means that clients will no longer receive an order first, as they do now. An order (aanwijzing) is an instruction by the Tax Administration to the client to adjust the employment relationship, usually within three months, to an employment agreement, and to incorporate it as such in the wage tax return.
As the period during which the law was not enforced is taken into account, corrections will only be made with retroactive effect until the date of lifting, i.e. 1 January 2025. This will be different if the Tax Administration ascertains that there is malicious intent on the part of the client, of if an order given earlier was not followed. In those cases, retrospective levies may also be imposed for the period prior to 1 January 2025, back to five years maximum.
Fining policy
‘Supportive measures’, such as an accommodating fining policy, have been announced to soften the blow of the enforcement suspension coming to an end. For instance, in 2025 no punitive fine (50% maximum of tax payable) will be imposed yet if the organisation can prove that it is taking steps to fight false self-employment. It is therefore important to start taking such steps in time.
Model agreements
At present, it is possible to work with a model agreement of the Tax Administration, which offers certainty about the qualification. However, practice has shown that this certainty is of limited value. It can only be determined in an ex-post review, based on all relevant facts and circumstances (especially the way in which the work was done in practice), whether an employment agreement exists. A clear example of this is the Deliveroo case, in which the work was also done according to a model agreement.
That is why the government has decided to stop using the model agreements. However, model agreements already approved will remain valid until their end date. Importantly, these agreements offer certainty only as long as the work is actually being done according to the conditions set out in the agreement. Incidentally, this does not mean that we advise you to stop using the model agreements immediately. When using the model agreements, both the client and the contractor should be aware of the limited value of this use. Besides, we advise you to examine critically whether your current practice is still in conformity with the model agreement.
In conclusion
Since enforcement will start as of 1 January 2025, it is important that clients examine their working with self-employed persons critically, because retrospective levies may be imposed after that date. In addition, a punitive fine will be risked if the client is unable to prove that steps are being taken against false self-employment. Apart from law enforcement by the Tax Administration, it is already possible now that the false self-employed person himself, or a trade union and/or pension fund, will claim an employment agreement. This may have big (financial) consequences for your organisation.
Our experts have a lot of experience with assessing employment relations and suggesting possible solutions. We often involve a tax expert too in such assessments. We would be pleased to visit you in order to prepare an assessment together. Would you like to receive more information, or are you interested? Please contact Ruud Schepers or Eylard van Fenema.