The topic of “ZZP” (self-employed persons without staff) is undoubtedly the subject that has prompted us to type the most on our keyboards to date. Last week, Minister Koolmees and State Secretary Snel informed the House of Representatives of the current state of affairs in a detailed letter.
Not much news
The Chamber letter contains little that is new in itself. The biggest news is somewhat hidden away in one of the final paragraphs. There, the ministers state that, due to identified conflicts with European law, the proposed new legislation may not come into force until 1 January 2021 (it is currently scheduled to come into force on 1 January 2020).
The concluding paragraph of the letter to Parliament notes that the Government recognises that, in the longer term, more extensive and fundamental changes to legislation and regulations may be required. For the time being, however, it is sufficient to resolve a number of urgent bottlenecks with the Balanced Labour Market Act (WAB) and the measures relating to continued payment of wages.
The solution
The plan is still to work with the following categories of self-employed people:
- At a low rate, there is no longer any question of self-employment; instead, the work must be carried out as an employee (this is referred to as: ALT; Low-Rate Employment Contract);
- If the rate is high, the self-employed person may choose to work as a sole trader (referred to as: opt-out);
- between the low and high rates lies the so-called client’s statement: this is a web module that helps clients and contractors determine whether a self-employed person is working on a self-employed basis.
For the ALT A new employment contract will be created in the Civil Code. Where the conditions for the ALT are met, the client will be granted the authority required to fulfil the employer’s obligations. The contractor will be obliged to carry out the work personally.
The tariff threshold for the opt-out will amount to €75. If the hourly rate is €75 or more, the self-employed person may choose to be treated as a self-employed person. However, there is an additional condition: the assignment must not last longer than one year or involve the performance of regular business activities. A self-employed person who opts out is excluded from cover under the employees’ social insurance schemes. An opt-out declaration can never have retrospective effect.
The details of the web module This is probably the most difficult part of the process. The module includes a detailed questionnaire. If the answers lead to the conclusion that the work is carried out on a self-employed basis, the client’s declaration is issued. This declaration provides the client with assurance that no employment relationship exists.
Clarification of the concept of authority
The Government had promised to provide clarification of the concept of a relationship of authority by 1 January 2019. This promise is being fulfilled by means of a document attached to the letter to Parliament annex. This explanation will be added to the Payroll Tax Handbook with effect from 2019.
The annex identifies five elements that contribute to the establishment of a relationship of authority:
- management and supervision;
- comparability of staff;
- working hours, location, materials, aids and tools;
- the way in which the worker presents themselves to the outside world;
- other relevant aspects.
It is beyond the scope of this article to go into detail on all these elements. Which elements are decisive depends on the specific case. Ultimately, it is the court that decides whether a relationship of authority exists, but in practice the Tax and Customs Administration will use this guidance as a guideline.
What is the current status?
The situation in 2019 will therefore be the same as it was in the second half of 2018. The DBA Act is in force, but is not being enforced by the Tax and Customs Administration. Only if the Tax and Customs Administration can prove beyond doubt that a self-employed person has clearly been working in an employment relationship will additional tax and social security contributions be levied.