The Government states in a voluminous Chamber letter that, from 1 January 2025, active assessments will resume to determine whether self-employed individuals without employees are genuinely working as self-employed persons.
Enforcement moratorium
As of that date, the intention is to lift the so-called enforcement moratorium. This complex term simply means that the Tax and Customs Administration does not actively (or, at any rate, only to a very limited extent) check whether an employment relationship actually involves a degree of self-employment such that the client is not required to pay payroll taxes and social security contributions on the remuneration paid.
Before that happens, the following measures will be introduced:
- creating a more level playing field for different types of employment contracts and self-employment arrangements;
- clarifying the rules on when a person is working as an employee or as a self-employed person;
- strengthening and improving enforcement.
A level playing field
In this area, the 2023 tax plans include, amongst other things, the accelerated phasing out of the self-employed person’s tax allowance and the phasing out of the tax-deductible retirement reserve. These measures are intended to bring the tax burden on the income of self-employed individuals (profit) more into line with the tax burden on the income of employees (wages).
Clarification of the rules
In order to clarify the rules, the Government wishes to enshrine the following three key elements from case law in legislation (a detailed explanation of this section is included in the annex) Assessment of the authority relationship (in the letter to Parliament).
- Are instructions given and is the work supervised (formal authority)?
- Is the work organisationally embedded within the client’s organisation?
- Is this a case of self-employment?
Legal presumption of an employment contract
There will be a legal presumption that an employment contract exists. This will be linked to an hourly rate. This legal presumption works in such a way that, if a contractor claims to be an employee, the client must prove that no employment contract exists.