What is the DBA Act?
The Wet Deregulering Beoordeling Arbeidsrelaties, better known as the Wet DBA, is a Dutch legislation introduced to clarify the employment relationships between clients and self-employed persons without personnel (zzp’ers). The purpose of this law is to prevent false self-employment, where a zzp’er actually works as an employee without the corresponding rights and obligations. The DBA Act helps make the difference between a self-employed person and an employee clearer by using model agreements.
These model agreements, which have been approved by the Tax Office, help clients and self-employed workers to correctly qualify their employment relationship. This helps prevent misunderstandings and potential legal problems. The law is intended to protect both zzp’ers and their clients from improper employment relationships and the associated tax risks.
Why is false self-employment a problem?
Sham self-employment occurs when a self-employed person actually works as an employee, but is classified as self-employed on paper. This can lead to various problems, both for the self-employed person and the client. For the self-employed, it often means that they are not entitled to social securities such as a pension plan, continued payment during illness, or unemployment benefits. This makes their employment position vulnerable and insecure.
For clients, false self-employment can lead to legal and financial risks. If the Tax Office finds that there is a disguised employment relationship, the client may be held responsible for paying back payroll taxes and social security contributions. In addition, it can cause reputational damage and the client may face fines and additional taxes.
How does the DBA Act work in practice?
In practice, the DBA Act uses model agreements approved by the Tax Office. These agreements help define the employment relationship between client and self-employed worker. The idea is that as long as both parties adhere to the terms of the agreement, there is no false self-employment.
The Tax Office plays an important role in assessing these working relationships. They can check, if necessary, whether the cooperation corresponds to the arrangements in the model agreement. If this is not the case, the Tax Office can decide that there is an employment relationship, with all the tax consequences that this entails. In 2025, the enforcement moratorium will be lifted, meaning that the Tax Authorities can take stricter action for violations.
What role does the principal’s statement play?
The client declaration is a document that can help clarify the employment relationship between a self-employed worker and a client. It provides a way to gain advance certainty about the tax status of the partnership. By completing this declaration, clients can demonstrate that they have correctly assessed the employment relationship.
This document can be useful for both the self-employed person and the client, as it helps prevent false self-employment. By using this statement, both parties can be better prepared and avoid potential problems with the Tax Office. It is a tool to make cooperation transparent and clear.
What are the consequences of non-compliance with the DBA Act?
Failure to comply with the DBA Act can have significant consequences for both the client and the zzpp’er. For the client, this can lead to retroactive levies, whereby wage tax and social security contributions must be paid retroactively. In addition, penalty fines can be imposed, which can be substantial, depending on the amount of the unpaid amounts.
For the self-employed, failure to comply with the law may mean that their status as a self-employed person is called into question, which could affect their own tax returns and social security. So it is vital that both clients and self-employed workers are aware of their responsibilities and take the proper steps to correctly qualify their employment relationship.
In conclusion, it is important for both zzp’ers and clients to be well informed about the DBA Act and its obligations. Read more about this in our white paper. We are happy to help navigate these complex regulations and ensure that collaboration between self-employed individuals and clients is smooth and hassle-free.
