The sector in which you are classified as an employer can make quite a difference. Contributions are significantly higher in some sectors than in others. This will come to an end from 2020. At least, if the WAB ...will then be introduced. This means that, for all sectors, there will be one high rate (for fixed-term contracts) and one low rate (for permanent contracts).
Shopping
Employers (and their advisers) have turned it into something of a game to try and find the most favourable sector classification. Minister Koomees of Social Affairs and Employment now refers to this as ‘shopping around for the most favourable sector’. There are now well over 1,000 applications for reclassification each year, as well as objections, appeals and cassation cases concerning decisions on sector classification. This places an unreasonably heavy burden on the capacity of the Tax and Customs Administration. Koolmees states this in a letter to the House of Representatives.
Blocked
With effect from 29 June 2018, it is no longer possible to change the sector classification retrospectively. This has removed the main incentive for ‘shopping around’ for the most favourable sector classification. By being classified retrospectively in a favourable sector, employers were sometimes refunded hundreds of thousands of euros in overpaid contributions. This was because the Tax and Customs Administration would then refund the overpaid employee insurance contributions for up to five years.
If it transpires that an employer has been classified in the wrong sector and, as a result, has underpaid contributions, the Tax and Customs Administration may adjust the classification with retroactive effect. In that case, the underpaid contributions must be paid retrospectively for a maximum of five years.
Employers can no longer be classified in different sectors for different types of work (split connection). Furthermore, it is no longer possible to be classified in the sector of one (or more) employer(s) with whom the employer forms an economic or organisational unit, or in the sector of the trade or line of business with which his business is deemed, by virtue of mutual links, to be a subsidiary business or subsidiary institution (group affiliation). Applications for these connections will no longer be processed if they are submitted after 29 June 2018, 17:00.