Vivienne Wormsbecher from Blue umbrella presents this comprehensive guide to help you determine whether you are truly self-employed within the meaning of Dutch employment law.

From January 1, 2025, the Dutch tax administration will begin to fully enforce the bogus self-employment regulations, a measure that could have a significant impact on expats working as freelancers or independent contractors in the Netherlands.

What is fake self-employment?

False self-employment, or schijnzelfstandigheid In Dutch, this occurs when an individual presents themselves as self-employed but in fact works in an employee-employer relationship in accordance with labor law.

This practice is of concern to the Dutch government, as it can lead to unfair competition and a reduction in workers’ social security.

Main changes and implications

From 2025, the Dutch government is making the fight against false self-employment a priority and is introducing the following changes:

• Stricter enforcement: The IRS will have the power to impose fines and back taxes on businesses that hire self-employed workers for work that is not truly independent.
• Transition period: A one-year transition period will be put in place, during which employers and workers will not face heavy penalties if they can prove they are taking steps to address fake self-employment issues.
• Retroactive corrections: The tax office can impose back taxes for a maximum of five years, but only from January 1, 2025.

The impact on expatriates and businesses

For expats working as freelancers or independent contractors in the Netherlands, these changes could have significant implications:

• Reassessment of working arrangements: Expats and the companies that hire them will need to carefully evaluate their working relationships to ensure compliance with the new regulations.
• Potential transition to employment contracts: Some companies may choose to convert freelance positions into permanent jobs to avoid possible penalties.
• Decreased flexibility: The new rules could reduce the flexibility that many expats enjoy in self-employment.

How to determine true self-employment

To help expats and businesses navigate these changes, here are some key factors that distinguish true self-employment:

1. Clear project-based work: Assignments should be specific and project-based rather than ongoing general work.
2. Work control: Self-employed workers should have significant control over how and when they complete their work.
3. Using your own equipment: The use of personal laptops and other tools necessary for work may indicate true independent work.
4. Separated from corporate culture: Avoiding integrating into the social fabric of the company (for example, not attending company events) can help maintain a clear distinction.

How to prepare for changes

As the effective date approaches, expats working as freelancers in the Netherlands could take the following steps:

1. Review current arrangements: Evaluate your working relationships with clients to ensure they meet true self-employment criteria.
2. Communicate with customers: Discuss upcoming changes with your customers and work together to ensure compliance.
3. Seek advice from a professional: Consider consulting tax professionals specializing in expat taxation to understand how these changes may affect your specific situation.
4. Stay informed: Stay informed of any further announcements or clarifications from the Dutch tax authorities regarding these new regulations.

The big picture

These changes are part of a broader effort by the Dutch government to improve labor market conditions and create a more level playing field between different forms of employment. Other measures include the introduction of compulsory disability insurance for the self-employed and the gradual reduction of tax deductions for the self-employed.

Although these new regulations aim to protect workers and ensure fair competition, they have raised concerns among some independent workers and industry associations. Critics argue that strict enforcement of the law could negatively impact industries that rely heavily on self-employment, such as health care.

As the implementation date approaches, it is crucial for expats working as freelancers or independent contractors in the Netherlands to stay informed and prepare for these significant changes in the Dutch job market landscape .

Are you worried about your freelance status? Blue Umbrella can help you clarify your situation and its tax implications. Make an appointment now or call them on +31 (0)20 4687560.