Enforcement of the DBA Act has been further suspended until 1 July 2018. State Secretary Wiebes of Finance has stated this in a letter to the House of Representatives. Until then, only those who are clearly acting in bad faith will be dealt with by the Tax and Customs Administration under the DBA Act.
Suspend payment
The Civil Division of the Rotterdam District Court has confirmed that the lack of clarity surrounding the DBA Act does not constitute grounds for clients to withhold part of the payment of invoices issued by self-employed individuals. The private limited company that engaged the self-employed individual withheld 40% of the invoice amount. The private limited company cited the lack of clarity surrounding the DBA Act as justification for this. The amount withheld was intended to cover the risk that the Tax and Customs Administration might hold the company liable for taxes and social security contributions payable on the self-employed person’s fee.
According to the court, the risk of additional tax assessments no longer existed. Two letters from the State Secretary for Finance explicitly stated that the implementation and enforcement of the DBA Act had been suspended (initially until 1 January 2018 and subsequently until 1 July 2018). Leaving aside the question of whether the private limited company is entitled to suspend part of the payment as long as no additional tax assessment has been imposed, the court held that it follows from the aforementioned letters that such a situation will not arise.
Investigation into the DBA Act
By suspending the enforcement of the DBA Act, the government aims to give self-employed workers and clients sufficient time to adapt. In May, an official working group presented its report, setting out 10 options for policy on employment relationships.
The new Cabinet will have to decide which option to adopt in order to break the deadlock surrounding the implementation of the DBA Act. A number of options involve providing certainty or an explicit choice (opting in). These options do, however, bear some resemblance to the system of the Declaration of Employment Relationship (VAR) that applies to the DBA Act.