On 26 January 2016, the Senate held a debate with State Secretary for Finance Wiebes on the Deregulation of the Assessment of Employment Relationships (DBA) Bill. This bill provides for the abolition of the VAR (Declaration of Employment Relationship). The VAR will be replaced by a system of (model) agreements approved (in advance) by the Tax and Customs Administration, from which clients can derive indemnity regarding the deduction and payment of payroll taxes, provided that work is carried out strictly in accordance with the (model) agreement. The Tax and Customs Administration has already published a number of such agreements on its website.
Vote
Het Financieel Dagblad reports that on 2 February 2016, the Senate approved the DBA Act bill and, with it, the abolition of the VAR. A large majority comprising the VVD, PvdA, CDA, PVV, 50plus and OSF voted in favour of the bill.
During the debate, State Secretary Wiebes undertook to arrange for an independent legal review of the model agreements by a panel of experts. He also undertook to publish the Tax and Customs Administration’s internal assessment framework (the ‘Guidance on the Assessment of Employment Relationships’). There was a special surprise in store for supervisory board members; see our article Non-executive directors without a VAR are exempt from payroll tax.
VAR remains in place until 1 May
The preparatory phase, established as part of the transition from the VAR to approved (model) agreements, appears to be getting under way until 1 May 2016 (that was 1 April 2016). The VAR would then be abolished on 1 May 2016, and subsequently, during the implementation phase, which will run until 1 May 2017 (previously up to 1 January 2017) the Tax and Customs Administration had only audited these cases, but had not yet taken enforcement action (except in clear-cut cases).
Articles
We wrote previously about the abolition of the VAR:
* VAR Transition Plan – approved agreement
* No VAR, no BGL – but what then?
* Happy 2016; what are you going to get stuck into?