What is the DBA Act and why is it important?
The DBA Act, or Deregulation of Assessment of Employment Relationships, is a law in the Netherlands that sets out the rules surrounding the employment relationship between self-employed workers and clients. The goal is to prevent false self-employment and provide clarity on the fiscal status of the working relationship. In practice, this means that both the self-employed worker and the client are given certainty as to whether an employment relationship exists and what tax obligations are involved.
This law is especially important because it places responsibility on both the self-employed worker and the client. This means that both parties must look carefully at the content of their working relationship. By making clear agreements and recording them well, they can avoid problems with the tax authorities. This is very important, because false self-employment can lead to additional taxes and fines.
How does the DBA Act affect the relationship between self-employed workers and clients?
The DBA Act defines the responsibilities of both the zzp’er and the client. It emphasizes the importance of clear agreements and arrangements to reduce risks of retrospective tax assessments by the tax authorities. For the client, this means that careful consideration must be given to how the working relationship is designed. For example, it must be determined whether the zzp’er really works independently or whether there is a relationship of authority, which could indicate employment.
For freelancers, it is important to clearly indicate that they are independent and do not perform the same tasks as permanent staff. It is wise to agree in advance on working methods and responsibilities to avoid the Tax Office qualifying the relationship as employment. This helps both parties limit their legal and tax risks.
What are the legal obligations for clients under the DBA Act?
Under the DBA Act, clients must ensure a proper assessment of the employment relationship and its recording in contracts. It is essential that the client can demonstrate that there is no employment relationship. This can be done by using a model agreement approved by the Tax Office. This agreement must be specific about the nature of the work and the self-employment of the zzp’er.
Failure to comply with these obligations can lead to legal and tax consequences. The Internal Revenue Service may decide to impose surcharges for unpaid payroll taxes and social security contributions. In serious cases, fines may also be imposed. It is therefore important that clients do their homework properly and ensure watertight records.
What risks do self-employed workers face with the DBA Act?
Zzp’ers should be aware of the risks of false self-employment and how to prevent it. An important risk is that the tax authorities may subsequently determine that an employment relationship did exist. This could mean that the self-employed person is still considered an employee and that wage tax and social security contributions have to be paid.
To minimize these risks, self-employed workers should make sure they have good contracts and a clear statement of work. It is important to prove that they work independently, for example by having multiple clients and being responsible for their own working hours and work location. Using a model agreement can help with this, but does not offer a complete guarantee.
What are the recent developments and changes in the DBA Act?
Recent changes and policy developments surrounding the DBA Act, including enforcement and future government plans, are affecting self-employed workers and clients. One important development is the lifting of the enforcement moratorium as of 2025. This means that from then on, the Tax Authorities can again actively enforce and impose surcharges in cases of false self-employment.
With this, the government wants to restore balance in the labor market. There is increasing pressure from politicians and trade unions to tackle false self-employment. The government wants to make the law more effective and offer better protection to employees who work as freelancers, but should actually be employees. It is therefore important for both freelancers and clients to keep abreast of the latest developments and adjust their collaborations accordingly.
At WerfSelect, we understand how important it is to be well informed about the DBA Act and the legal aspects of labor relations. We therefore offer support to both freelancers and clients to make collaborations successful and compliant. Feel free to contact us for more information or advice. Read more about this in our whitepaper.
