Do you use self-employed workers to carry out work? If so, it is time to take a critical look at this. After a period when the tax authorities took little action, we are slowly seeing a shift in the audits of work performed by self-employed workers. 

Legislative changes After the abolition of the Declaration of Independent Contractor Status (VAR) and the introduction of the DBA Act governing the relationship between companies and individuals performing work, the qualification of self-employed workers has not become any easier. This is evidenced by the fact that the Tax Authorities to date did not enforce the implementation of the DBA Act. This so-called enforcement moratorium is expected to be lifted by 2025. 

However, we see in practice that the Tax Authorities are already focusing more and more extensively on self-employed hired workers in tax audits. In principle, no corrections are made for the past and no fines are imposed unless there is malicious intent, but the Dutch tax authorities can give directions for the future that must be followed. This can have major consequences for your operations if suddenly more people are qualified as employees than previously expected. Not only employment law obligations, but also the consequences for employee insurance contributions and health care insurance contributions are just a couple of the areas which can lead to a significant rise in employer costs.

Recent developments

The above shift seems to be partly driven by recent case law. Already in 2020, the Supreme Court ruled that the intention of the parties is not important in a work relationship, but that what matters are the facts and circumstances (so called participation ruling). No matter how the relationship is designed in an agreement, if the facts and circumstances do not match them then there may still be an employment relationship. 

The Deliveroo ruling

This year, the Supreme Court subsequently handed down the Deliveroo ruling. This ruling provided more guidance as to when exactly there is or is not an employment relationship. Although this is a ruling in civil proceedings, it does have tax significance. Following the participation ruling and the Deliveroo ruling, there have now been rulings by lower courts in which the judge applied the Supreme Court's judgments with regard to the employment relationship. 

To determine whether an employment relationship exists, all the circumstances of the case must be considered. Important circumstances here are:

  • The nature and duration of the work performed
  • The manner in which the work, as well as the working hours, are determined
  • The 'embedding' of the work and the person performing the work in the organisation and business operations of the person for whom the work is performed
  • The obligation (or not) to perform the work personally
  • The manner in which the remuneration is determined and paid
  • Whether the person performing the work bears a commercial risk
  • Whether the person performing the work behaves (or can behave) as an entrepreneur in the course of business.

Clearly, the facts are incredibly relevant. How they are expressed in the contract is of secondary importance. The participation ruling had already determined that the intention of the parties - even if it was included as such in the agreement - does not matter, but the same applies to the other provisions. For example, the agreement may include that someone can be replaced, but if this does not actually occur at all in practice, this still seems like an empty provision.

The model agreements

The model agreements published by the Dutch tax authorities on its website should give companies some form of legal certainty. However, the question is how usable some of these agreements still are. For example, one of the model agreements is based on being able to use a substitution. However, the Supreme Court has ruled that the entitlement to use a substitute worker does not rule out the existence of an employment relationship. The actual meaning of the substitution clause in the agreement is important here. The question is what happens to the substitution clause in practice. 

In view of the above, if you make extensive use of assignment agreements, we advise you to contact your trusted RSM advisor. We can then carry out a check for you on the relationship between your company and the self-employed workers you use for your business to identify the consequences and necessary actions relating to the above-mentioned case law.