Summary
For several decades, the Netherlands has struggled to enact clear legislation regarding self-employed persons. The Declaration of Employment Relationship (VAR), introduced in 2005, was intended to provide freelancers with advance clarity regarding their tax status. In practice, however, this regime often resulted in pseudo self-employment. Its successor, the Deregulation of Assessment of Employment Relationships Act (Wet DBA) of 2016, failed to resolve these issues and instead generated further uncertainty. Consequently, the Dutch Tax Authority implemented an enforcement moratorium, which remained in effect for nearly ten years. This moratorium was lifted earlier this year, once again causing unrest. To this day, it remains unclear when an individual qualifies as self-employed, which may result in tax penalties and retrospective assessments. As a result, clients are currently cautious about engaging contractors. Despite twenty years of legislative efforts, a satisfactory solution has yet to be achieved. The proposed Clarification of Assessment of Employment Relationships Act (Wet VBAR), as amended and submitted on 27 March 2025, aims to provide greater clarity regarding the position of self-employed persons in the labour market. However, this proposal also creates uncertainty, according to the political parties VVD, D66, CDA, and SGP, who are the initiators of a new legislative proposal: the Self-Employment Act. An explanation of this new Act follows below.
Purpose of the the Self-Employment Act
This private member’s bill will largely replace the Wet VBAR and pursues three objectives:
- To provide legal certainty for self-employed persons and their clients.
- To better align legislation with the modern labour market and to recognise the need for autonomy among a large group of self-employed persons.
- To create a level playing field in the labour market and to improve the social protection of self-employed persons.
The bill therefore seeks to clarify the status of self-employed persons and to adapt legislation to the modern labour market, in which individuals desire greater freedom in their work. The aim is not to influence the number of self-employed persons, but to establish by law when an individual qualifies as self-employed, thereby providing legal certainty. The Act recognises self-employed persons and obliges them to make provisions for incapacity for work and for retirement, in order to guarantee social security and a level playing field.
Core provisions of the Self-Employment Act
The bill introduces a clear statutory assessment framework to determine when an individual may operate as a self-employed person. This framework consists of two tests: the self-employment test and the working relationship test. Both tests must be satisfied in order to obtain certainty regarding the contractor’s self-employed status.
1. Self-Employment Test – the individual must:
a. operate ath their own expense and risk;
b. maintain proper accounts;
c. conduct themselves as an independent entrepeneur in the economic sphere;
d. make adequate provision for incapacity for work (the manner of provision is at the discretion of the self-employed person); and
e. arrange a proportionate contribution for retirement provision (the manner of provision is at the discretion of the self-employed person).
2. Working Relationship Test – the following conditions must be met:
a. there is freedom in the organisation of work;
b. there is freedom in the organisation of working hours;
c. there is no hierarchical control; and
d. the parties intend to perform work other than on the basis of an employment contract.
The Act also makes it possible to introduce, at sectoral level, a legal presumption of employment in sectors with high levels of pseudo self-employment. The sponsors also support a legal presumption of employment based on a minimum hourly rate, as provided for in the Wet VBAR.
The Self-Employed Persons Act is open for internet consultation until 24 June 2025.
We will, of course, keep you informed of further developments.