From 1 January 2025, the Dutch Tax and Customs Administration is going to enforce the Deregulation of Assessment of Employment Relationships Act (DBA). How will this affect principals and self-employed workers?
After years of procrastination, next year the Tax and Customs Administration will start assessing, as a matter of standard practice, whether assignment agreements may be employment contracts and therefore subject to payroll tax. In a memorandum and an enforcement plan, the Tax and Customs Administration explains why it chooses to do this and how it intends to make it possible.
By actually enforcing the regulations on the qualification of assignment and employment contracts now, the Tax and Customs Administration aims to tackle two problems. The best known of these is combating false self-employment in which employees have become contractors and thus lose their employment law protection. Added to this, in the current overstrained labour market, there are also employees who want to enforce their employment as contractors so that they pay less tax on their earnings.
To enable enforcement, the Tax and Customs Administration is pursuing three tracks:
In the enforcement strategy for 2024, there is a lot of room for giving information and analysis of situations. Initially, when an agreement is incorrectly qualified, the Tax and Customs Administration will mainly focus on qualifying it correctly for the future. This can be done by issuing an instruction. Sanctions are actually only imposed if an agreement is deliberately incorrectly qualified or if an instruction from the Tax and Customs Administration is not followed.
The main change as of 1 January 2025 is that the instruction will lapse. Companies and self-employed persons will then have to adjust their agreements immediately, and the Tax Authorities may impose surcharges. These additional levies can also be imposed for the period that the Tax and Customs Administration did not enforce the DBA Act.
The Tax Authority itself talks about an “ambition” to start enforcing by 1 January 2025, and that reservation seems sensible. The reason for repeatedly delaying enforcement is that the DBA Act does not make sufficiently clear the difference between a self-employed person and an employee. That problem is still unresolved. The Deliveroo ruling contains a large number of points of interest for determining whether an agreement is an employment contract or a contract for services, but such a holistic approach does not provide quick and unambiguous answers.
It is also now clear that the Clarification of Assessment of Employment Relationships and Legal Presumption Act, which is supposed to transpose the Deliveroo ruling into law, will not come into force before 1 January 2026 and possibly even later. It is even questionable whether this bill will be pushed through as several parties that will participate in the new cabinet have already indicated their desire to split the law in order to better distinguish between false self-employed workers who need extra protection and self-employed workers who consciously choose extra freedom. The desired predictability therefore seems a difficult goal to achieve.
Despite these caveats, companies would do well to take enforcement on 1 January 2025 into account, especially given the possibility of retrospective levies for the earlier period.
Do you have questions about the DBA Act? Or would you like us to assess whether your assignment contract might still be an employment contract? We will be happy to give advice. We also assist employers and entrepreneurs with other questions or disputes concerning employment law. Please contact us:
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