Understanding false self-employment in the Netherlands

False self-employment (schijnzelfstandigheid) has always been an issue in the Netherlands, but since a moratorium on enforcement was lifted on January 1, 2025, the Dutch tax office has been paying more attention to this issue. Here's what you need to know and how to avoid potential pitfalls.

What is false self-employment?

False self-employment occurs when someone pretends to be self-employed but is actually working with another company in a way that resembles regular employment. The Dutch tax authorities use several criteria to determine whether a working relationship is truly self-employment or disguised employment.

The holistic assessment approach

It is important to understand that the Dutch tax authorities use a holistic approach when assessing working relationships. They look at all the factors and circumstances in combination rather than relying on a single criterion.

This means that each case is assessed individually, taking into account the unique aspects of the employment relationship.

Key factors considered by the Dutch tax office

1. The nature and duration of work: Simple, long-term tasks often indicate employment, while complex, short-term projects indicate self-employment.
2. Work schedule and location: Greater freedom in determining work schedule and location is seen as a feature of self-employment.
3. Integration into the organisation: The more integrated you are (for example, participating in team meetings or using company equipment), the more likely it is that this will be seen as a job.
4. Personal performance of the job: If you cannot be replaced without permission, this may be perceived as employment.
5. Negotiating terms: Limited bargaining power indicates employment, while a lot of bargaining power implies self-employment.
6. Payment method: Sending invoices yourself is more indicative of self-employment than automatic payments.
7. Level of compensation: Receiving higher rates compared to similar employees suggests self-employment.
8. Commercial risk: Taking risks (for example, liability or non-payment) indicates self-employment.
9. Entrepreneurial behaviour: Marketing yourself, having multiple clients and investing in your business all point to true self-employment.

The importance of combined factors

The Dutch tax office will not base its decision on a single factor. Instead, they will look at the overall picture of all these elements combined. For example, even if you are flexible in your work schedule, this in itself does not guarantee that you will be considered self-employed if other factors strongly suggest an employment relationship.

Tips to prevent false self-employment

If you are self-employed, there are simple ways that you can prove this to the Dutch tax authorities. Make sure you are doing as many of the below as possible:

1. Diversify your client base: Work for multiple clients rather than relying on one client.
2. Negotiate your own terms: Actively collaborate in determining your rates, working hours and project scope.
3. Invest in your business: Buy your own equipment and software and invest in professional development.
4. Market your services: Maintain a professional website and actively seek new clients.
5. Maintain financial independence: Handle your own billing and manage your business finances separately.
6. Be clear about your role: Make sure your contract clearly defines your status as an independent contractor.
7. Avoid benefits similar to an employee: Do not accept benefits normally offered to employees, such as paid vacation or sick leave.

What to expect from the Dutch tax authorities

In 2025, the Dutch government will focus on guidance and support rather than immediately imposing penalties when enforcing the rules regarding false self-employment. The government understands that clarifying the boundary between self-employment and employment is crucial. Therefore, in 2025, the focus will be on helping businesses and contractors understand and comply with the regulations.

While the tax authorities will still be monitoring working relationships to detect potential cases of false self-employment, the emphasis will be on providing information, offering advice, and giving businesses the opportunity to correct their practices. Financial penalties for misclassification will generally not be applied in 2025, unless there is clear evidence of intentional abuse or obvious disregard for the rules.

The goal is to create a level playing field and ensure fair competition without immediately punishing those who are genuinely trying to comply.

Examine your business relationships

As an expat in the Netherlands, it is essential to be aware of these issues surrounding self-employment. Remember that the Dutch tax authorities look at all aspects of your working relationship in combination and make an assessment on a case-by-case basis.

If you work as a freelancer or are considering it, make sure that your working relationship actually reflects self-employment in all the factors mentioned. If in doubt, seek professional advice or contact the Dutch tax authorities directly.

By understanding and adhering to these guidelines, you can protect yourself and your clients from potential tax problems related to false self-employment.