The stream of questions from the House of Representatives and the responses to them from State Secretary for Finance Wiebes regarding the DBA Act – which came into force on 1 May 2016 as the replacement for the VAR – shows no sign of abating. On 19 May, the responses to questions from the Member were published Van Wyenburg (D66) and of the members Ziengs and De Vries (VVD). The second set of answers includes a detailed list regarding enquiries received about the DBA Act.
Temporary replacement
Mr Weyenburg asks whether it is correct that the Tax and Customs Administration takes the view that an employment relationship exists when a self-employed person carries out the same work as others in paid employment, for example in the case of cover for maternity leave, sickness or temporary replacement.
Wiebes does not provide a specific answer to this question. He does, however, state that the fact that a replacement is involved is not a decisive factor when assessing the self-employed status of the self-employed person hired on a temporary basis. If the stand-in performs the same work, but the terms and conditions differ from those of the person who was in employment, the stand-in self-employed person may well be working as a self-employed person (not in employment).
And, as Wiebes emphasises, that was already the case under the VAR. The only difference compared with the VAR is, of course – though Wiebes seems to overlook this in his answers – that the VAR gave the client certainty in advance that no payroll taxes or social security contributions needed to be deducted. Under the DBA Act, the client simply has to wait and see whether (to put it in legal terms: to trust that) the Tax and Customs Administration subsequently agrees that the self-employed person is working under different terms and conditions than the employee they are replacing.
Implementation period
The DBA Act came into force on 1 May 2016. The first year is considered an implementation period. This means that, during this period, the Tax and Customs Administration (1 May 2016 to 1 May 2017) will not yet enforce the law, but will merely monitor compliance (pointing out to parties that an employment relationship exists, but not imposing any assessments or correction obligations in respect of payroll taxes).
Wiebes explicitly confirms that if, after 30 April 2017, it transpires that an employment relationship already existed during the implementation period, no adjustment will be made in respect of the implementation period, except where:
- an employment relationship was in fact already in place before 1 May 2016, and the parties are making no effort whatsoever to structure their working relationship in such a way that it does not constitute an employment relationship;
- the Tax and Customs Administration had already indicated, in the period prior to 1 February 2016, that employment relationships identified during an investigation were to be classified as (fictitious) employment, and determines after 1 May 2016 that the facts and circumstances have not changed;
- there is gross negligence or wilful misconduct.
Previously on the self-employed
The DBA is born
Non-executive directors without a VAR are exempt from payroll tax
Will the self-employed person be reassured?
You are hiring an artist or a professional sportsman or sportswoman