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25 June 2019

Minimum rate for all self-employed persons from 2021

Employment law & payroll taxes

Tax compliance snippet Lux

On 24 June the Dutch government presented an update on the plans for the new legislation for the large group of self-employed persons in the Netherlands. The plan for the bottom of the labour market for self-employed persons is presented and the plans for the top of the labour market have been changed. Soon these plans will be published in a draft bill for internet consultation. These new rules are supposed to enter into forceon January 1 2021. Below is a summary of the plans.

Minimum rate of 16 euros for all self-employed persons

The plan is to introduce a minimum rate of 16 euros to ensure that all self-employed persons earn enough to provide for their basic needs. This minimum rate would apply to all self-employed persons, regardless of the duration of their assignment, whether it concerns regular business activities or not, and whether it’s a business or private client. The government does not intend on excluding a certain group of self-employed persons, unless it can be demonstrated that the minimum rate is not necessary for a specific group.

A self-employed person has to calculate the costs and hours prior to the assignment. Clients must then check whether the minimum rate is being met. If afterwards it turns out that there have been additional costs or hours, business clients are obliged to pay extra (private clients are not). Business clients are jointly responsible for the correctness of the information provided by the self-employed person, which means that they must consider whether the costs and hours made are plausible/acceptable.

Self-employed persons and interest groups can go to civil court to enforce the minimum rate and administrative supervision by the Social Affairs and Employment Inspectorate will take place.

Declaration of self-employment for persons with an hourly rate of 75 euros or higher

In the coalition agreement the government proposed an opt-out for the top of the self-employed labour market. Now the government wants to take it a step further with a ‘declaration of self-employment’. The clients are then protected against certain risks if the person is later qualified as an ‘employee’. They are not only protected against additional income tax and social security contributions, but also from the continued payment of wages in the event of illness, the supplementary payment of pension premiums to the pension fund and collective labour agreement obligations.

Parties must meet certain requirements for the use of the declaration of self-employment and they must ensure that they continue to meet the requirements. If they no longer meet the requirements, the self-declaration no longer applies, with retroactive effect.
It concerns the following five cumulative requirements:

  1. In the contract must be stated that the parties do not have the intention to conclude an employment contract.
  2. The hourly rate must be at least 75 euros (2019 price level).
  3. The agreement is entered into for a maximum period of one year. For the calculation of this period the following is important: all work previously performed by the self-employed person for the same client, regardless of the contract form, counts and these periods are added up. A group company is regarded as one client. After an assignment is completed and six months have passed, a new term of one year will start.
  4. The client and contractor both have to sign the declaration of self-employment.
  5. The client must be registered at the Chamber of Commerce.

The government is working on a web module for a client declaration

For all self-employed persons without a declaration of self-employment the question remains whether the person is in fact a self-employed person or an employee. As such the government is working on a web module to address this issue. This module enables clients to obtain a client declaration if the questions show that there is no employment relationship. This measure was already announced by the government. In her letter to Parliament on 24 June 2019 the government indicates that the web module is currently in a test phase and after this summer more information will follow about the progress made. It had previously been announced that the web module would be ready for use at the end of 2019.


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