The Minister of Social Affairs and Employment and the State Secretary for Tax Affairs and Tax Administration informed both Houses of the Dutch parliament on 16 December 2022 in the form of a progress letter about the state of affairs in the self-employed persons dossier. The progress letter set out the various measures that the government intends to take in the field of working with and working as a self-employed person. Measures will be taken along three lines to redress the balance and make the rules around working with and as a self-employed person more future-proof. This article provides an overview of the main measures the government plans to take in this area.

Line 1: creating a more level playing field between employees and self-employed persons by reducing the differences between working in employment and being self-employed

The government aims to achieve this by taking the following measures:

1. 1. 1. tax measures (including an accelerated phasing out of the tax allowance for self-employed persons and abolition of the tax-deferred retirement reserve);
      2. mandatory disability insurance for self-employed persons, yet to be worked out in more detail;
      3. the possibility of collective bargaining by self-employed persons; and
      4. strengthening of the position of self-employed persons in the Social and Economic Council.

Line 2: clarifying rules for the assessment of employment relationships (self-employment or employment?)

1. 1. The government wishes to clarify the ‘authority criterion’ (‘working in the service of’) by recording the relevant rules developed in case law. This involves the following three main elements that, as is currently the case, must be assessed in conjunction with each other:
      1. 1. 1. Material (‘classic’) authority: are instructions given and is the work supervised?
            2. Organisational embedding: is the work organisationally embedded in the organisation? Organisational embedding occurs when the work is an essential part of the operations (e.g. teaching at a school or nursing work at a hospital).
            3. Independent entrepreneurship: can the self-employed person be considered an independent entrepreneur? This is a contraindication for the existence of an employment contract. To answer this question, elements listed for this purpose in the Payroll Tax and Social Security Contributions Handbook may be considered, such as:
               • performing work on the basis of a result obligation;
               • higher remuneration than persons working under an employment contract;
               • specific knowledge and expertise of the worker and his or her own operating assets.
   2. Work is also underway on a legal presumption of an employment contract linked to an hourly rate. If that rate is below a certain standard, a legal presumption of self-employment will apply. The level of that rate limit is still being considered.

Line 3: improving enforcement

An ‘enforcement moratorium’ currently applies. The Tax Authorities are taking corrective action only in cases of malicious intent and deliberate, manifest pseudo self-employment situations. The government wishes to end this enforcement moratorium entirely by 1 January 2025 at the latest and aims ‘to normalise the Tax Authorities’ enforcement as much as possible’ until that time. This means that enforcement will take place in accordance with the Tax Authorities’ general Implementation and Enforcement Strategy. The premise of this strategy is that citizens and businesses ‘comply with the rules of their own accord where possible, without coercive and costly actions on the part of the Tax Authorities’. However, the Tax Authorities have since expanded their inspection capacity.

Conclusion

If the government implements these proposed measures, self-employed persons and businesses that engage them will be faced with a great many changes. The addition of the ‘organisational embedding’ criterion to the classification issue would be a particularly significant change. However, the plans in the progress letter have yet to be enacted. A legislative proposal is expected by the summer of 2023. We will keep you informed.

Please contact Lise van den Heuvel (+31-6-23492248) for more information on this subject.

This article was published in the Newsletter Vestius of February 2023