Following two progress letters in 2018, Minister Koolmees again informed the House of Representatives June 24, 2019 about the progress around the replacement of the DBA Act. We summarize the most important developments for you.

Bottom of the market
For the bottom of the market, there will be a minimum rate of €16 for self-employed workers. This is an alternative to the mandatory employment contract for self-employed workers at the bottom of the labor market, which was found to be in conflict with European legislation. With this, the government achieves the same goal: preventing self-employed workers from being hired at too low a rate.

Upper end of the market
For the upper end of the market, there will be a self-employed person's declaration (until now called the opt-out), which will not only provide certainty in advance about payroll taxes and employee insurance, but also as far as possible about labor law consequences (e.g., continued payment of wages during illness), pension obligations, and collective bargaining provisions. This is a further implementation of the agreement in the coalition agreement on the opt-out.

The following conditions apply to use of the self-employment statement:
1. The assignment contract must state that the parties intend not to enter into an employment contract;
2. The contractor must be registered with the Chamber of Commerce;
3. The client and the contractor both sign the declaration of self-employment;
4. The labor remuneration is at least €75 per hour;
5. The agreement is entered into for a maximum of one year.

*** Assignment period of up to one year ***
The Cabinet considers it desirable to include the criterion of a maximum of one year, a period previously cited in the coalition agreement (2017), in order to prevent the self-employment declaration from being used by self-employed persons who perform work for a longer period of time.

Should the work last longer than a year, the declaration of self-employment will no longer apply to the period after that year. This does not mean that clients cannot hire self-employed workers for longer than one year, but in practice it will mean that clients seeking certainty will have to use the web module to request an opinion on a working relationship.

Web module and client declaration
The government is working on a web module, which, on the basis of the answers to a number of questions, can establish in advance that there is no employment relationship. In that case, the web module provides a so-called employer's declaration. This declaration gives the client advance certainty that no payroll tax needs to be withheld and remitted and no employee insurance premiums and income-related healthcare insurance contributions need to be paid. With the term "certainty in advance" comes a comment, which is described in the letter as follows: "The principal's declaration is valid insofar as the web module has been filled out truthfully and is used accordingly in practice." Enforcement on the latter will come when the legislation is finally in place.

*** Weighting of factors ***
The web module will be designed on the basis of legislation, practical cases and case law in the context of the qualification of the employment relationship. In order to keep the administrative burden low, the possibility of reducing the questionnaire as much as possible is being examined.

The University of Amsterdam has developed a legal database that provides insight into case law in the fields of labor law, taxation and social security from approximately the last ten years with respect to the classification of an employment relationship. The analysis of this database is used to arrive at a weighting of the individual questions: which element weighs(s) heavily in the qualification of the employment relationship.

Meanwhile, an (extensive) questionnaire has been distributed to 50,000 clients with a request to complete the questionnaire. On the basis of data analysis, it is being considered whether an algorithm can be developed that, through smart routing with as few questions as possible, arrives at a correct outcome.

The web module will be tested during the summer. After the summer, the House of Representatives will be informed about the results of this test phase.

*** Criterion 'regular business activity' to be dropped ***
Contrary to the coalition agreement, the cabinet proposes to drop the criterion 'regular business activity'. There is much resistance to this criterion among self-employed workers and clients. In particular, the fact that it is a new criterion that has not yet been fleshed out by case law, and that its meaning will continue to change over the years, raises the concern that it will generate a lot of discussion. This would thereby lead to more uncertainty and less clarity, which is undesirable for the Cabinet.

Another delay, enforcement moratorium extended
The Cabinet is currently working on legislation. The aim is to put this legislation out for Internet consultation in the third quarter of 2019. The legislation is scheduled to come into force in 2021, which was previously scheduled for January 1, 2020. In line with this, the enforcement moratorium has also been extended until at least January 1, 2021.

*** Enforcement on malicious intent difficult ***
During the enforcement moratorium, the Inland Revenue enforces malicious intent. In practice, however, it turns out to be very difficult to meet the heavy burden of proof for malice. Therefore, the possibilities for enforcement during the moratorium will be tightened: as of January 1, 2020, the Tax and Customs Administration will also be able to enforce when principals do not (or do not sufficiently) follow instructions from the Tax and Customs Administration - which it gives when it takes the position that the qualification of the employment relationship for payroll taxes is not in accordance with current legislation - within a reasonable period of time.

More information
Want to know everything about (the replacement of) the DBA Act? On this website you will always find the latest news. Also download the free white paper, where we have put together all the important information for you.

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