Stricter approach to false self-employment by the Tax Authorities from 2025

From 1 January 2025, the Tax Authorities will intensify enforcement on hiring false self-employed persons. The improvement and strengthening of the enforcement by the Tax Authorities is part of a package of measures by the government to combat false self-employment and create a level playing field between employees and self-employed persons.

On 1 May 2016, the Deregulation of Assessment of Employment Relationships Act (DBA Act) was introduced and the Declaration of Employment Relationship (VAR) was abolished. Since then, parties must ensure that  there is no actual employment relationship. For this purpose, they could use model agreements from the Tax Authorities. Instead of the DBA Act offering simplification, the new system turned out to be complicated and unclear.

Due to the lack of clarity and uncertainty that arose after the abolition of the Declaration of Employment Relationship, an enforcement moratorium was imposed. This moratorium allowed companies to adjust their working relationships without immediate risk of fines, except in cases of malicious intent in the application of the rules.

This enforcement moratorium will be lifted from 1 January 2025, which means that inspections by the Tax Authorities will intensify and checks for false self-employment will again become part of the Tax Authorities’ regular inspections. Employers should be prepared for possible correction obligations, additional tax assessments, and fines and additional levies if there is evidence of disguised employment. These measures can be applied retroactively as of 1 January 2025, which can result in significant financial risks for employers. The Tax Authorities will not impose fines in 2025 if the client can prove that measures are being taken to combat false self-employment.

In addition, the House of Representatives adopted a number of motions on 1 October 2024 calling, among other things, for enforcement and additional levies to be imposed only in problem cases for the time being, at least for one year, and for the human dimension to be taken into account in the choice of enforcement instruments in other cases , and for a clear assessment framework to be introduced. In addition, a motion was adopted that aims to allow for preliminary consultations with the Tax Authorities on the assessment of employment relationships and also to allow already approved model agreements to remain effectively in force after 1 January 2025. It is not yet clear to what extent the government will follow up on these motions. However, it is clear that employers must identify who within the company is working as self-employed and determine whether this status is appropriate for the work that these self-employed persons perform.

How to proceed?

To avoid correction obligations, additional tax assessments and fines, it is important that employers evaluate their working relationships with self-employed workers. This means that they should check whether, based on the current way of working, the self-employed person qualifies as an ‘employee’. Case law has indicated which elements play a role in this assessment. The main criteria for this are:

• The duration and number of hours per week in which the assignment is performed.
• The extent to which the contractor’s work is comparable to that of employees.
• The ability of the client to give directions and instructions regarding the performance of the work and the contractor’s obligation to follow these instructions.
• The contractor’s use of its own tools, resources or equipment to perform the work.
• The contractor’s specific knowledge which is not present within the organisation.
• The ability of the contractor to work for other clients without permission and to be replaced.
• Who bears the liability risk for damage caused by the contractor.

These factors need to be weighted on a case by case basis.

Van Doorne is happy to help you find tailor-made solutions for the self-employed persons you work with. Want to know more? Feel free to contact Cara Pronk and Mattias Niens.