As a freelancer, you enjoy the freedom and flexibility to work for multiple clients. However, the Dutch Deregulation of Labour Relations Act (DBA) brings significant obligations and risks. Starting in 2025, the Dutch Tax Authority will intensify enforcement, which could directly impact your way of working. What steps can you take to comply with the rules and avoid risks? Here are the key considerations for freelancers.
Why is the DBA law important for you?
The DBA law was introduced to combat false self-employment and replaced the old VAR declaration. Instead, the responsibility for correctly assessing the working relationship now lies with both clients and contractors. This has led to new challenges, especially for freelancers working with multiple clients.
Want to learn more about what the DBA law entails? Read our detailed blog: What does the DBA law mean?
What are the criteria for self-employment?
The Dutch Tax Authority and the Supreme Court use multiple criteria to determine whether you are truly self-employed. Key questions include:
- Do you work under the authority of the client?
Does the client dictate how, where, and when you perform your work? The less control they have, the stronger your status as a freelancer. - Do you bear commercial risk?
Are you liable for mistakes, and do you work based on an obligation of effort or result? Bearing risk is a key indicator of self-employment. - Do you have multiple clients?
Do you work for several clients and are not dependent on just one? This strengthens your status as an entrepreneur. - Do you use your own resources?
Do you use your own tools, equipment, and software? This shows that you operate independently. - Do you act as an entrepreneur?
Consider actively acquiring clients, building a personal brand, and investing in your business.
What can you do now to avoid problems?
- Work with a model agreement: Use a model agreement approved by the Dutch Tax Authority. These agreements help clarify that there is no employment relationship, but they also require that the terms are followed in practice.
- Ensure multiple clients: Work for at least two or more clients per year. This reduces the risk of the Tax Authority classifying your work as employment.
- Invoice correctly: Send invoices yourself and use professional software to keep your administration in order. Ensure that VAT is calculated and paid, and be prepared for a Tax Authority audit.
- Invest in your business: Invest in your visibility, such as creating a professional website, business cards, and an email address. This shows that you are actively building your client base and running a business.
- Use your own resources: Work with your own laptop, tools, vehicle, or other equipment. This demonstrates your independence and reduces reliance on the client.
- Regularly review agreements: Ensure that your contracts and agreements are regularly reviewed and updated if necessary. Changing legislation may impact your self-employed status.
What will happen in 2025?
Starting January 1, 2025, the Dutch Tax Authority will strictly enforce rules on false self-employment. This means clients and freelancers must exercise extra caution. If there is doubt about your status as a freelancer, the Tax Authority can impose back taxes and penalties, with retroactive effect from January 1, 2025.
What are the consequences of errors?
If the Tax Authority determines that your collaboration with a client is an employment relationship, the consequences can be significant:
- Your client must pay backdated payroll taxes and contributions.
- You may lose your self-employed status and tax benefits.
- In severe cases, fines may be imposed.
How can you prepare?
Proactive action is essential to avoid problems. Make sure that you:
- Keep your administration in order.
- Make clear agreements with clients.
- Work with multiple clients and actively build your entrepreneurial activities.
If you have doubts about your situation, use online tools provided by the Tax Authority, such as the Entrepreneur Check.
Want to know more about the legal and tax implications of the DBA law? Check out our detailed blog: What does the DBA law mean?
How Practical | Excellence in Finance can help
At Practical | Excellence in Finance, we understand the challenges freelancers face. Our experts can assist you with:
- Assessing your entrepreneurial and tax status.
- Optimizing your administration and agreements.
- Advising on how to comply with the DBA law requirements.
With our support, you can fully focus on your business while we ensure you meet all legal requirements.
Contact us today for more information and advice!
