On May 1, 2016, the Dutch VAR system will be replaced by new model contracts. This will make life easier for self-employed ZZP'ers in the Netherlands and it will protect clients. The goal is to provide more clarity for both parties.
In early February, 2016, the Dutch government approved abolishing the VAR (Verklaring arbeidsrelatie). VAR is a declaration of independent contractor status, a document stating that the client is hiring a ZZP'er.
It is proof for clients of self-employed professionals or freelancers that they will not be held responsible for any payroll taxes with regard to these professionals working for them.
ZZP stands for zelfstandige zonder personeel, which are individuals who work for themselves and do not hire employees. This includes both freelancers and people who run their own company.
The VAR will be replaced by model agreements. There will be general and individual model agreements, as well as model agreements per sector and profession.
The basic purpose remains the same. By concluding a model agreement, both client and contractor know who will be responsible for paying payroll taxes and contributions.
The Dutch government is instituting a transitional period of one year. During this phase, ZZP'ers and clients have the time and flexibility to adjust their agreements and no action will be taken by the government (with the exception of extreme cases of fraud). Starting on May 1, 2017, the Dutch tax agency will begin to monitor the contracts.
The exact details will be made available soon, and the Belastingdienst (Dutch tax office) is mainly interested in schijnzelfstandigheid or situations involving exploitation of self-employed people.
Schijnzelfstandingheid is when a person has a standard labour contract with an employer but officially declares that they are self-employed. This has been difficult to verify by the Dutch tax authority.
The Netherlands has around 800.000 ZZP'ers who have self-employment as their main source of income. Another 600.000 self-employed use it as secondary income. It is unknown how many are fraudulent ZZP'ers, but it is estimated that it’s less than 10 percent.
If you have a VAR from 2014 or 2015 and you will continue to do the same work for the same clients under the same conditions, you can continue to use that in 2016.
If anything changes in your situation, you can apply for a VAR that’s valid in 2016 until the new rules go into effect. After May 1, 2016, it is no longer possible to apply for a VAR.
If you currently don’t have a VAR you can instead use a new model contract. A number of model contracts are already available for download from the Belastingdienst website and are free for use by both client and ZZP'er.
More versions will be made available by the Belastingdienst in the coming weeks and months. Each one has a clear explanation for which professions and situations it should be used. They are divided into three categories:
› general model contracts
› example contracts per sector and profession
› individual contracts
It’s possible to write up your own model contract as well. Prior to entering into a contract with a ZZP'er, a company will be able to send the new model contract to the Belastingdienst for approval.
A client and contractor are not required to submit their model contact to the Dutch tax agency, however. The advantage of using one of the official contracts or getting one approved is that it guarantees that the client will not be held responsible for payroll taxes and contributions.