We have often described them as a soap opera: the developments surrounding the status of Dutch self-employed workers. In doing so, we are drawing a parallel with television series that seem to go on forever. The soap opera surrounding the self-employed has added yet another episode. And the certainty that we’ll be able to enjoy this soap opera right up until 1 January 2020.
Roadmap
The position of self-employed workers is one of the issues that the Rutte III Government wishes to tackle promptly. However, initial consultations with stakeholders in the sector have already shown that this is not quite so straightforward. The ideas for a solution, outlined in the parliamentary letter “Towards a new balance in the labour market” and in our article So what’s the situation with self-employed people?, were cool (perhaps change (or a better word) received.
Minister Koolmees of Social Affairs, together with State Secretary Snel of Finance, recently Roadmap for the replacement of the DBA sent to the House. The main news is that the current suspension of enforcement has been extended until (for the time being?) 1 January 2020. Until then, only serious cases of malicious behaviour taken to task by the tax authorities. This situation has existed ever since the VAR was replaced by the DBA Act on 1 May 2016.
Clarifying authority
Before 1 January 2019, the Minister for Social Affairs will issue a clarification of the concept of a relationship of authority. This can be done more quickly as it does not require any legislative amendment. First, the Minister will consult with stakeholders in the field to identify exactly where the issues with the concept of ‘authority relationship’ lie.
Malicious individuals
It is still a bit unsettling that regulations are only enforced against those acting in bad faith. Self-employed workers and clients have to wait five years to see whether the Tax and Customs Administration might deem them to be acting in bad faith. After all, the tax authorities have those five years in which to make back-dated claims for tax and social security contributions from the client.
The roadmap contains a comprehensive definition of the term ‘malicious’: “You are acting in bad faith if you deliberately allow a situation of obvious bogus self-employment to arise or continue, because you know – or ought to have known – that it is in fact an employment relationship (and thereby gain an improper financial advantage and/or undermine the level playing field in an unfair manner).”. And then “This does, however, concern cases in which clients operate in a context of wilful misconduct, fraud or deception. This includes situations involving deceit, falsification or collusion, and situations that lead to serious distortion of competition, economic or social disruption, or where there is a risk of exploitation.”.
From 1 July 2018, enforcement will no longer be limited to those who are clearly acting in bad faith. Enforcement will also take place where the Tax and Customs Administration can prove that there is:
- a (fictitious) employment relationship;
- a clear case of bogus self-employment;
- deliberate bogus self-employment.