How will you be effected as a self employed person?

Are you self-employed? To combat disguised employment, a new bill has been put forward that may effect you as a self-employed person: the VBAR (Clarification of Assessment of Employment Relations and Legal Presumption) was introduced in June 2024 and submitted to the Council of State by Minister Van Gennip of Social Affairs and Employment. It looks like the the bill will come into force on the 1st of January 2025. The new laws will succeed the current enforcement moratorium under the DBA Act. If you work as a self-employed person, it is vital that you understand the criteria that will be used to determine the legal status of your employment collaborations.

Do you work with a model agreement? Here also, changes are imminent!
As of 2025, it is not only the DBA that will be enforced, the Tax and Customs Administration will no longer approve model agreements. In September the Dutch government published this statement on its (website).
"The use of such model agreements is no longer tenable, because model agreements cannot provide certainty in advance about working outside the employment contract. This depends on how work is done in practice, not on what is written in a contract.  Current model contracts will continue to be respected until the end date of the agreements.'

Why VBAR?

In recent years, there has been a major increase in the number of self-employed people in the Netherlands. However, according to the government, in some of these cases there is no real self-employment. These self-employed persons work, voluntarily or not under a similar relationship of authority as employees, while employers do not comply with the obligations that apply to their staff, such as accruing pension, paying payroll tax and contributing to Employee insurance. In order to better trace this group of so-called false self-employed workers and to prevent self-employed persons from having the obligations but not the rights of employees, the VBAR has been created. The earlier law that defined criteria for self-employment - the enforcement moratorium under the DBA Act - leaves too much grey area open and, according to Van Gennip and various employee organisations, should be abolished. If the work you do as a self-employed person, could potentially be classed as disguised employment, You may have more rights or your client may need to offer you employment under the forthcoming VBAR Act.

What are the new criteria for self-employment?

In some cases there were previously no clear criteria to determine whether someone is self-employed or employed, the VBAR has (more) clearly defined definitions. Please check carefully whether the work you perform for your client meets the criteria set by the VBAR for self-employed persons:

• Relationship of authority: there are no hierarchical instructions and supervision by the client (e.g. management by a salaried manager).

• Embedding in the organisation: the work may not form an integrated part of the regular business activities (e.g. you are working on an assignment, a defined project).

• Entrepreneurship: you bear entrepreneurial risks, such as investments and profits.

• Multiple clients: you do not work exclusively for 1 client.

The above criteria were already in place, but were less clearly defined and therefore easier to circumvent. . You may like to read this article to help you determine whether you are considered a self employed entrepreneur.

• What is new is the criterion for the required minimum hourly rate for self-employed persons: if the hourly rate you are paid as a self-employed person is € 33 or less, this will be seen as an indication of false self-employment.

The expectation is that establishing clear criteria such as these will prevent disguised employment by providing a fair and objective standard for establishing whether self employed people have genuine independence.

Consequences for self-employed workers

Please check whether your ongoing collaboration(s) meet the requirements of the VBAR. If this is not the case, your client may be in violation of the VBAR. What next? First of all you should talk to your employer. Indicate that the contract form does not comply with the (upcoming) law and that the employment relationship must be converted into a wage construction, or that the collaboration must be designed differently in order to meet the independence criteria. If your client is not open to the required change in the employment relationship, the new law gives you an option to challenge this legally. Is making a claim for a different employment relationship in court not something you feel comfortable with and are you unable come to an agreement with your employer/client? Then as an intermediate step, you may wish to consider mediation via a trade union representative or legal advisor. If the VBAR is triggered, you are more likely to be vindicated.

Remaining independent according to VBAR

If you are self-employed and do not consider yourself to be in disguised employment but your employment relationship does not meet the criteria of the VBAR? Then discuss with your client(s) what changes can be made to bring your collaboration in line with the new law. Perhaps this will require an increase in your hourly rate, greater freedom in your work schedule or working with more clients. Making these changes now will avoid you being defined as an employee at a later date, after all this can have negative consequences for your tax payments and social security.

Find out more

If you want to learn more about the VBAR and the consequences for you as a self-employed person, you can visit the website of The Central Government. Trade union FNV also has additional information about disguised employment here (in Dutch) Lupacompany  has also published articles on the  Criteria for independence and rising self employment in the Netherlands. Are you unsure about your position as a self-employed person?  We are always happy to discuss your situation with you. Please feel free to contact us!

 

In April 2023, the Dutch Minister of Social Affairs and Employment Karien Van Gennip held a briefing on proposed measures to future proof the labour market. As an employer, you may have to make changes that should offer workers more security and make companies more flexible. In this article we will discuss the proposed measures.

Stimulus

At the beginning of 2020 the Borstlap Committee advocated for labour market reform as being necessary and desirable. An imbalance in the labour market was identified as a problem. The solution to this would be to distribute rights, obligations and risks more evenly in the future. Following this analysis, measures are being taken to future proof the labour market. These measures were recently presented to Minister van Gennip.

Objectives of the labour market reform

Putting a stop to 'excessive flexibility' and false self-employment on the one hand, and stimulating entrepreneurship on the other, was translated into two objectives: More security for employees and protection for the self-employed is the first. The second objective is to help companies become more agile. Below you can read which measures Minister van Gennip presented for each objective.

Timetable: Intentions and Commitment

The proposed measures are not yet official, but will probably be implemented. Minister Van Gennip intends to present the legislation to the House of Representatives in the spring of 2024. The measures should then become mandatory by 2025. You are expected as an employer to be prepared for this from 1 January 2025.

Measures for employees and the self-employed

1. The 0-hour contract will be abolished. Expected effective date: from spring 2024.
2. On-call contracts become fixed basic contracts for the number of hours for which they are scheduled at least by default. For employees who structurally work more hours, the basic contract must be adjusted. This way, employees will know they where they stand. Expected effective date: January 1, 2025.
3. Faster security in temporary work. Those who work through an employment agency are more likely to receive a permanent contract.
4. Tackling 'revolving door constructions', by making stricter rules for temporary work. After three temporary contracts, it is now possible to get a contract again after six months. That will be five years.
5. There will be compulsory disability insurance for self-employed persons, so that self-employed people will be protected by social security in the event of a setback.

Measures to increase agility for entrepreneurs

1. Small employers can get clarity on whether they can replace an employee after one year of illness.
2. The new Employee Retention Crisis Scheme ensures that employers who are affected by a crisis or calamity that falls outside the scope of the entrepreneurial risk (such as during the corona crisis) can continue to employ staff.
3. Overtime will become less expensive for the employer. At present, overtime is covered by the high unemployment insurance premium rate, the flex rate. Soon this will no longer be the case, for larger employment contracts.

Want to know more about the Dutch labor market reform?

Would you like to read more about the upcoming reform of the labor market? Then you can view the letter to parliament that Minister van Gennip wrote (in Dutch only)   here.

Several measures have been announced, the latest on March 17, 2020. Many of the measures have yet to be worked out. On this page we keep it up so you know where to go and how we can help you.

There are three groups of schemes. The first group is the loans group, which means that the loan terms have been relaxed. The second group is the tax measures and the third group is the assistance and compensation group. The fourth group is the 'under investigation group', which are measures that are under investigation, as soon as more is known we will let you know.

 

Group 1: Loans

1. Increase in guarantee ceiling from max. 50 to 150 million.
2. Relaxation of conditions for loans via Qcredits
3. Broadening BMKB credits.

Group 2: Taxes

1. Deferral of tax payment
2. Lower interest rates and no default penalty
3. Reduce 2020 provisional assessment

Group 3: Assistance and compensation

1. Compensation (4,000 euro) for directly affected entrepreneurs
2. Assistance for all entrepreneurs
3. Short-time working has become a loss of revenue scheme

Group 4: Under investigation

Specific sectors research into the following matters: the culture sector and the tourist tax

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Group 1: Loans

 

1. Increase of the guarantee ceiling from a maximum of 50 to 150 million.

Scheme summary:

The loans in the Guarantee Entrepreneur Financing scheme (abbreviated as GO) will have a higher ceiling. The government guarantees 50% of the loan up to an amount of 150 million in loans, the other half comes from a bank.

For whom:

For small and medium-sized enterprises and large companies with loan applications from 1.5 million.

Application:

Runs through the bank

 

2. Relaxation of conditions for loans via Qcredits

Scheme summary:

Existing loans will be repaid for the next six months and interest rates will drop to 2% in those six months.

For whom:

Entrepreneurs who have a loan from Qcredits.

Application:

To request yourself via Qcredits, read more here: https://qredits.nl/contact/qredits-hulplijn/

 

3. Broadening BMKB loans

Scheme summary:

Companies affected by the consequences of the coronavirus can make use of the extension of BMKB credits. The BMKB has been extended until June 30, 2022. Companies with a credit requirement of up to € 266,667 can finance three quarters with BMKB credit, otherwise the limit will be no more than half of the credit. A government guarantee of 90% applies to the BMKB credit.

For whom:

For companies up to 250 FTE personnel and credits up to 1.5 million.

Application:

Via the bank, read more here: https://www.rvo.nl/subsidie-en-fancieringswijzer/borgstelling-mkb-kredie...

 

Group 2: Taxes

1. Deferral of payment of taxes

Scheme summary:

If your company has payment problems due to the consequences of the corona virus, you can ask the Tax and Customs Administration for special deferral of payment. Deferral of payment can be requested for the following income tax, corporation tax, sales tax and payroll tax.

For whom:

All entrepreneurs regardless of legal form.

Application:

Procedure: make a declaration, wait for assessment, send letter with request for deferment of payment explaining how Corona has led to payment problems. The collection is stopped and the tax authorities will ask for a statement from a "third party". The third can be a financial advisor (such as Lupacompany). The statement must be submitted within four weeks.

 

>>Update March 19: after receiving the request for postponement, you will immediately receive a three-month postponement. The 'third' statement is only necessary for a request for postponement longer than three months.

 

>>> Lupacompany helps, let us know if you can use this.

 

2. Lower interest and no default penalty

Scheme summary:

The interest charged by the tax authorities goes to 0.1% and the default penalty (for not paying) is temporarily not imposed.

For whom:

All entrepreneurs regardless of legal form.

Application:

See deferral for this. Presumably automatically executed.

 

3. Reduction of provisional assessment for 2020

Scheme summary:

Do you expect a lower profit due to the corona outbreak and are you now paying a provisional income tax or corporate tax assessment? Then you can change your provisional assessment so that you immediately pay less tax.

For whom:

All entrepreneurs regardless of legal form.

Application:

Request via a reduction request (change provisional assessment) to the tax authorities.

>>> Lupacompany can do this for you, let us know.

 

Group 3: Assistance and compensation

1. Compensation (4,000 euro) for directly affected entrepreneurs

Scheme summary:

Payment of 4,000 euros to entrepreneurs most affected by closure. The amount is intended to bear the fixed costs (rent, energy, etc.).

For whom:

For entrepreneurs with business space (not for home workers) who had to close by direct and indirect government measures. This concerns the catering industry, culture sector, travel industry, hairdressers, beauty salon,…?

>>UPDATE MARCH 29: more is known who is getting this compensation (name program: TOGS), read here for more info (Dutch): https://artlupa.com/nl/inzicht/togs-tegemoetkoming-ondernemers-getroffen-sectoren-%E2%82%AC4000-compensatie. 

Application:

At the time of writing (March 18, 2020 at 11:00 AM) not yet known.

>>UPDATE MARCH 29: The website of the RVO is open for application, https://www.rvo.nl/subsidie-en-financieringswijzer/tegemoetkoming-schade-covid-19

2. Assistance for all entrepreneurs

Scheme summary:

Payment to cover income. This is a gift at a minimum level of assistance for a period of three months.

For whom:

For all entrepreneurs

>>UPDATE MARCH 29: Also for companies with a director/shareholder, the director should at least own 50% of the shares.

Application:

At the time of writing (March 18, 2020 at 11:00 AM) not yet known. Runs through the municipality.

>> Update March 19: there is already an arrangement for entrepreneurs, namely the BBZ (special self-employed assistance) and the benefit duration is 12 months, this is a social assistance benefit. The application normally takes 13 weeks. The corona gift is something else.

>>UPDATE MARCH 29: more on this program  (name TOZO) (in Dutch) on our website https://artlupa.com/nl/inzicht/aanvraag-bijstand-voor-ondernemers-torzo-tozo

3. Shortening working hours has become a loss of turnover scheme

Scheme summary:

From 17 March 2020, the working time reduction is called the Temporary Emergency Measure Bridging for Work Retention (NOW). The aim is to ensure that employers do not fire their employees. Employers who have a turnover reduction of at least 20% as of March 1.

For whom:

The scheme applies to all employers and to all employees. From a turnover reduction of 20%. Advance payment based on 80% of the allowance. If the turnover has decreased by 100%, the allowance will be 90% of the wage bill, and if it falls by 20%, the contribution will be 18% of the wage bill.

Application:

This is going through the UWV, at the time of writing (March 18, 2020 at 11:00 am) it is still unclear how the application is progressing.

https://www.uwv.nl/werkgevers/actueel/noodfonds-overbrugging-werkgebruik...

Dutch Election 2012: political parties over entrepreneurship, what does that mean for you?

The Dutch election of 2012 have come up with some changes for the modern form of work relations and entrepreneurs. We have decided to compare the programs on points that may be interesting for you as an entrepreneur. We have summarized our findings in the following text.

Collective basic insurance for self-employed professionals

The great common denominator in the election programs for self-employed professionals is improving the social services. The greatest political parties have all included in their election programs that they want to ensure security for self-employed professionals. This mostly concerns the creating of a collective basic insurance for matters such as the incapacity to work and pension. The plan not only entails the creation of these services, but also that these insurances are affordable for all self-employed professionals.

Aiming for more social security is, of course, a good development. However, it also ensures that the differences between employees and the self-employed fades even more. This could have negative consequences for the fiscal facilities for entrepreneurs on the long term.

Decreasing bureaucracy/ regulations entrepreneurs.

Another theme that the political parties paid attention to is decreasing the bureaucracy and regulation for entrepreneurs. D66, for example, wants to instigate an Ombudsman for entrepreneurs, who focusses specially on bureaucratic burdens. D66 is also of the opinion that automatic granting of licences should take place if the government does not act within the time given. The VVD wants the law to be tested based on all enterprises and not just on the larger SME-businesses. According to the PvdA procedures and costs can be decreased if entrepreneurs can take care of most of their procedural affairs on a digital counter and the CDA argues for the continuation of the program ‘Vermindering Regeldruk’(decreasing the pressure of rules) Where regulation in the case of tax, supervision and special planning is simplified for entrepreneurs.

Fiscal treatment entrepreneurs

Although there are differences between political parties in the case of fiscal treatment of entrepreneurs, it has become apparent that the aim is for more equal treatment, be it between employees and employers, or between self-employed professionals and director majority shareholders. To reduce the differences between self-employed professionals and director majority shareholders, the SME-profit exemption for self-employed professionals has been created. This measure seems to have worked until now. The VVD is of the opinion that the SME-profit exemption should be raised and the SME-rate in corporate tax lowered: in short, that entrepreneurs in respect to employees pay even less tax. The PvdA, however, argues that the differences in fiscal treatment of self-employed professionals and employees should be minimalized.

According to a recently published rapport of the Centraal Plan Bureau (CPB policy Brief 12/02) the self-employed are more flexible than employees therefore have a stronger response to tax incentives. From this point of view fiscal favouring of the self-employed is justifiable. But, the CPB also states that the fiscal measures are not suited to stimulate innovation or create job opportunities. Therefore, the CPB is for abolishing the self-employed deduction in its current form and for raising the SME- profit exemption. This way the difference in fiscal treatment of entrepreneurs and employees becomes smaller, because the self-employed deduction causes entrepreneurs to pay less taxes than employees with the same income. No political party talks about abolishing the self-employed deduction, but both Groenlinks and D66 want to introduce reformations. D66 wants to change the hour standard to the revenue standard. Groenlinks wants to change the hour standard to an income dependent regulation. Although this seems like a good idea, the issue of the self-employed deduction published by the CPB is not resolved and these changes will certainly not make the self-employed deduction easier to manage: a revenue criteria is very hard to check and maintain and an income dependent regulation is more prone to fraud.

For more about the CPB rapport and the fiscal treatment of the self-employed, click HERE.

Conclusion

Based on these election programs we conclude that all political parties more or less have the same ideas about entrepreneurs and the entrepreneurship. There is no clear distinction between right or left winged parties concerning the suggested measures. We concluded that with all political parties a clear vision is lacking regarding entrepreneurship and the modern labour market