Government informs the House of Representatives on replacing "Wet DBA"

The Dutch government recently gave an update on the development of the proposed measures that are to replace the Deregulation Labour Relations Assessment Act ("Wet DBA") as of 1 January 2020. In addition, it has also informed the House of Representatives on the monitoring plan of the Tax Authorities with respect to labour relations as of 1 July 2018.

 

Progress in the replacement of the DBA Act

In the coalition agreement (autumn 2017), the government has put the following measures forward regarding labour relationships with independent contractors:

  • At a low hourly rate in combination with a long duration of the agreement or in conjunction with the performance of regular business activities, there is always a contract of employment.
  • At a high hourly rate in combination with a short duration of the agreement or in conjunction with the performing of non-regular business activities, an ‘opt-out’ of payroll taxes will be introduced.
  • For independent contractors above the ‘low rate’, a so-called ‘Employer Statement’ is introduced, which employers can obtain by completing a web module. The Employer Statement provides the contractor with certainty about the qualification of the employment relationship.

The government has indicated that it is now examining the abovementioned measures. For example, the government is assessing whether and how the web module can provide the right balance between different aspects: good enforceability by the Tax Authorities, certainty for entrepreneurs and their clients and a limited administrative burden. It is therefore not a given that the web module will in fact be realised. The government also investigates whether the mandatory employment in case of a low hourly rate (in combination with other criteria) is in accordance with EU-law. Moreover, the government examines the tariff prices and structures as well as the characteristics of self-employed persons and their contracts.

The earlier announced clarification of the authoritativeness criterion (‘begrip gezagsverhouding’) should be ready on 1 January 2019 according to the planning. In autumn this year, the government will inform the House of Representatives on further developments of the proposed measures and abovementioned actions.

Monitoring plan Tax Authorities per 1 July 2018

The law enforcement of the DBA Act has been suspended until 1 January 2020, except in case of ‘malicious parties’. Per 1 July 2018, the definition of 'malicious parties' will be broadened. As of that date, contractors and clients can be seen as malicious parties when three cumulative criteria are met: there is a (deemed) employment relationship; there is evident pseudo self-employment; and there is intentional pseudo self-employment.

The government has indicated the way in which the Tax Authorities will start monitoring per 1 July 2018. On 1 July 2018, the Tax Authorities will publish a monitoring plan which will give further effect on how employment relationships will be supervised by the Tax Authorities as of that date. The Tax Authorities will select a minimum of 100 clients to visit this calendar year. The selection includes both clients who have submitted a model agreement (regardless of whether the agreement has been approved) and clients who have not yet been involved with the Tax Authorities in this respect. The visits are divided over various branches and sectors.

According to the letter to the House of Representatives, the focus of the monitoring will be on clients who have not yet been identified as such or who do not work with an approved (model) agreement. Suspicions of pseudo self-employment received by the Tax Authorities during the visits may be grounds for further investigation.

The abovementioned measures imply for you as a client that from 1 July 2018 you have to be prepared for a possible audit by the Tax Authorities on your employment relationships with independent contractors. We will gladly advise you on this and inform you further when the monitoring plan of the Tax Authorities has been published.

 

Source: ‘Letter to Parliament Progress in measures ‘working as a self-employed person’, 22 June 2018

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Daniël Sternfeld

Daniël Sternfeld

Partner, PwC Netherlands

Tel: +31 (0)61 089 28 89

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