Assessing work relationship between client and contractor (Wet DBA)
Do you work as a freelancer or self-employed professional for 1 or more clients? Or are you the client of a self-employed professional? In the Netherlands clients and contractors have to establish that their agreement is not a form of employment. This requirement stems from the Employment Relationships Deregulation Act (Wet deregulering beoordeling arbeidsrelaties, wet DBA).
Please note: the DBA act was implemented to bring more clarity in client-contractor relations. This change in law has not proved effective enough. New legislation is pending, but it is not yet known when these rules will come into effect.
Preventing false self-employment
Contractor and client need to assess together if their business arrangement is in fact an employment relationship or not. If you accept an assignment as a self-employed professional or freelancer and it turns out to be a type of employment, this is called false self-employment or disguised employment. In this situation your client is actually your employer but he does not pay the taxes he should pay for employees (payroll taxes). Also, you cannot make use of specific tax benefits.
You must make sure you avoid false self-employment. The responsibility for this lies with both client and contractor.
Clients can use the Online employment relationship evaluation tool (in Dutch) to assess the employment relationship. Find out more about this tool and how to use it. Both clients and contractors can also use the diagram Is it paid employment? (Wanneer is er sprake van loondienst? In Dutch) of the Netherlands Tax Administration.
Enforcement of the act (wet DBA)
The Netherlands Tax Administration performs checks (in Dutch) to establish if there is an employer-employee relationship or not. The Tax Administration can impose corrective fines or taxes where they establish malicious intent with regard to fictitious self-employment or (obvious or deliberate) false self-employment constructions. They may also do so when a contractor/client fails to comply with instructions, for instance to make changes in the set-up of the employer-employee relationship.