State Secretary Wiebes of Finance has informed the Senate in a transition plan explained how he intends to manage the transition from the VAR to the approved (model) agreements. The timetable remains as previously announced. The VAR will be phased out as of 1 April 2016 permanently abolished. Until 1 April 2016, the client may derive an exemption from the withholding of payroll taxes from a correctly used VAR (the period from now until 1 April 2016 is referred to as the preparatory phase).
During the period from 1 April to 31 December 2016 (referred to as the implementation phase) it is no longer possible to derive an indemnity from a VAR, and an approved (model) agreement must be used. The Tax and Customs Administration will monitor the situation during this period (focusing primarily on providing information), but will not, in principle, take any punitive measures. However, enforcement measures will be taken in the following situations:
– the client and the contractor were working under a VAR-wuo or VAR-dga scheme prior to 1 April 2016, whilst in fact a (deemed) employment relationship existed, and the parties are taking no action whatsoever to structure the working relationship in such a way that the work is carried out outside the scope of an employment relationship;
– the Tax and Customs Administration had already informed the parties in writing, prior to 1 February 2016, that the employment relationships identified during the investigation were to be regarded as (fictitious) employment relationships;
– there is gross negligence or wilful misconduct covered by the existing policy rules.
From 1 January 2017 the new procedure applies in full and the Tax and Customs Administration applies a risk-based enforcement approach. External indicators also play a role in determining the specific details of this. These include, for example, reports from a particular sector or interest group suggesting that bogus self-employment is rife in that sector. Naturally, special attention will also be paid to possible bogus self-employment during routine audits by the Tax and Customs Administration.
With regard to the approved (model) agreements, the implementation plan marks a shift in approach. The aim is no longer to strive for around 40 sector-specific and general model agreements. Instead, there will be a smaller number of more general model agreements, which can be applied in a wide range of situations and sectors. The option to submit individual agreements for approval will remain. If these agreements are submitted before 1 February 2016, it will be clear by 1 April 2016 whether they have been approved.
With regard to the general model agreements that have already been published, consideration is being given to whether a number of the provisions contained therein could be worded in even more general terms. In all model agreements, both those already published and those to be published, the provisions relevant to tax or social security will be highlighted.
See also our previous articles on this topic: Model Contracts for Self-Employed Workers, Will VAR be replaced though? and No VAR, no BGL – but what then? On 24 and 26 November 2016, we are organising workshops in collaboration with 2BW Advocaten The new breed of self-employed worker.