Self-employed persons-update: state of affairs (replacement of) Act DBA

30 Jul 2019

In earlier reports, we have already informed you about the enforcement of the DBA Act, which is relevant to the question of whether an employment relationship should be qualified as an employment contract (employee) or assignment contract (self-employed person). Enforcement of this law has recently been postponed due to government plans for replacement of this new legislation.

Marieke ten Broeke

In the meantime, Minister Koolmees and State Secretary Snel have provided more clarity about this replacement legislation. In a letter from the House of Representatives dated 24 June 2019, they presented three new plans, which offers protection for the lower levels of the labour market, while also giving opportunity to entrepreneurs at the top of the labour market. Moreover, with these measures the government intends to offer more clarity to employing entities and the self-employed. These measures are as follows:

  1. A minimum (hourly) rate of EUR 16 for self-employed persons. According to the government, the introduction of this minimum rate will prevent self-employed workers from being hired at a rate lower than the minimum rate. With the minimum rate, the self-employed can provide for their essential needs.
  2. At the top, self-employed persons are protected by a self-employed persons declaration. This provides certainty in advance about the liability of payroll tax and employee insurance. To the extent possible, this statement will also provide certainty about employment consequences, pension obligations and collective agreement provisions. This offers entrepreneurs certainty that they work outside a more traditional employment contract, which gives them more room to do business.
  3. For employing entities of self-employed persons without employees, a so called 'client’s declaration' is created. This is an instrument to obtain certainty in advance about wage tax, employee insurance premiums and the contribution to the Healthcare Insurance Act. This client statement can be obtained after filling in a number of questions in a special web module. This web module will, based on legislation and existing case law, qualify the employment relationship and indicate whether or not there is an employment contract.

The government is currently working on legislation that regulates these plans. The aim is to online publish this legislation for internet consultation in the third quarter of this year. In the meantime, enforcement of the Act DBA is postponed until 1 January 2021. Until that time, the Tax Authorities may give instructions to employing entities in respect of which they take the view that the qualification of the employment relationship does not comply with current legislation. From 1 January 2020, the Tax Authorities have the option to take enforcement action if an employing entity does not comply with these instructions.

We will keep you informed of further (legal) developments.