Legal changes in the Netherlands affecting use of self-employment – return to VAR


Written on 19 October 2017

Last week the new Dutch cabinet’s governing agreement came out. As widely predicted, the Assessment of Employment Relationships (Deregulation) Act (the Act) is going to be withdrawn. This law was intended to crack down on the perceived growth in false self-employment but has been widely considered as impracticable.

In the new cabinet plans it appears that there will in large part be a return to the former  ‘labour relationship statement’ (VAR) system. This system of tax authorisation allowed self-employment status, provided (whatever the day-to-day activities of the workers) certain formats of contract were in place.

The Act was proposed because of concerns that the VAR system could be easily abused.

But changes are proposed: there will be an introduction of three categories of self-employed workers (SEW) with different rights:

1. SEWs that offer ‘low end’ services or – in the terminology used in the draft paper – ‘undifferentiated commodity services’. For this group of SEWs a minimum fee amounting to EUR 15 – 18 per hour (this is 125% of the minimum wages applicable to adult employees) will be introduced. If a SEW (i) would get paid less than this minimum fee and (iia) works on the basis of a contract term of three months or (iib) provides undifferentiated services , the SEW will be deemed to be an employee of the end user for tax purposes.

2. For SEWs that offer ‘high end’ services and are able to charge a service fee of EUR 75 or more, an ‘opt out’ system will be introduced (meaning no VAR authorisation is needed), provided that the SEW works on the basis of a contract with a term of one year or less or, in case the contract term is one year or longer, provides services that cannot be qualified as undifferentiated commodity services.

3. For SEWs in the middle of this spectrum, the VAR system will apply.

Osborne Clarke Amsterdam partner Jorgo Tsiris comments:

“This shows that the Dutch government – like any EU member state I would say – is struggling with the growth of self-employment”.

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*This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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Jorgo Tsiris

Partner, Head of Employment, Pensions & Incentives, The Netherlands

T +31 20 702 8618

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