In 2016, the Act on Deregulating Assessment Working Relationship (Wet Deregulering Beoordeling Arbeidsrelaties) was introduced. This Act intended to resolve certain fundamental issues by requiring parties to work on the basis of template contracts published by the Dutch tax authorities to ensure the tax position of an independent contractor. In practice – as expected by many professionals – the use of pre-approved template contracts did not work and this legislation was never fully enforced. The period during which the Act on Deregulating Assessment Working Relationship will not be enforced has been extended until at least 1 January 2020. This means that contractors and their clients will not receive any penalties if it is later established that their legal relationship qualifies as an employment contract. The Minister of Social Affairs has announced that he will submit a bill to amend the Act in the course of 2018.
The coalition agreement states that this legislation will be fully replaced by a new regime that effectively introduces three specific ‘categories’ of independent contractors, depending on the contractor’s remuneration.
- First category: independent contractors earning up to 125% of the applicable minimum wage (or in the case of a collective labour agreement, the lowest salary scale of that collective labour agreement).If these contractors earn between EUR 15 and 18 per hour, have a fixed contract, or perform work that may be considered to be part of the normal business activities, they will be deemed to be employees.
- Second category: contractors that earn more than EUR 15 to 18 per hour, but less than EUR 75 per hour.For this group, an ‘independent contractor statement’ is introduced. By completing an online questionnaire, companies can obtain certainty on the tax position of the contractor. This system is similar to that in the UK. To be able to successfully implement this system, the coalition agreement states that the existing requirement of a ‘relationship of authority’ when determining whether a contractor should be deemed an employee will be changed. There will be a stronger focus on material aspects of authority than on the formal aspects, such as the requirement to be present at certain times. These changes may result in a change in the qualification of the relationship in certain professions.
- Third category: contractors who are paid EUR 75 or more per hour and work for a short period of time (less than one year) or who perform tasks not considered to be part of normal business activities.This group will have the opportunity to ‘opt out’ of applicability of wage taxes and social security premiums.
In addition, the coalition agreement states that the new government will explore the possibility of introducing a new specific type of agreement to the Dutch Civil Code known as the ‘business owner agreement’ (ondernemersovereenkomst).
Further, the coalition agreement states that it intends to introduce a client declaration form for individual contractors (opdrachtgeversverklaring). This declaration entails that clients fill in a number of questions about the employment relationship with the individual contractor via a web module. If the outcome of the module does not show that the employment relationship qualifies as an employment contract, there will be no risk for the client for any additional taxation with respect to wage taxes.