In the past few years, freelancers and self-employed individuals could request for a Declaration of Independent Contractor Status (VAR statement, or Verklaring Arbeidsrelatie) with the Dutch tax administration (Belastingdienst). This Declaration that gave clients certainty about their wage tax status will cease to exist in 2016.
If clients held a Declaration of Independent Contractor Status in their administration, they did not risk wage tax assessments and penalties if the Belastingdienst found that the relationship with the contractor was in fact more like the relationship between an employer and an employee.
Although the of Independent Contractor Status was impopular, it gave client certainty. In 2016 it will be all about contracts and the actual application of these contracts. This will show what kind of relationship there is between a client and a contractor. There is some help. There are contract templates that have been preapproved by the Belastingdienst. If one of these templates is used and applied correctly, it will give some degree of certainty about the wage tax status of the contractor. It is also possible to request the Belastingdienst to give their opinion on your own contract that you want to use.
The changes will lead to more uncertainty, especially for clients, because it is no longer possible to work with freelancers and self-employed individuals (with or without their own limited liability company) without any risk of a wage tax liability.
We can help you find the correct contract template or help you draft your own contract. We can also help you asess the wage tax risks of a contract that you currently use, or request for an assessment by the Dutch tax administration. The Belastingdienst have the possibility to levy wage tax assessments until five years after the year of origin of the wage tax liability. Therefore it is better to be as certain as possible of every contract you enter with your freelancers and self-employed professionals.
