Working with interim professionals? Here’s what you need to know now that the Tax Authority has announced it will enforce, and how we can support you.

Legal Framework

The Deregulation of Labor Relations Assessment Act (DBA) ensures that self-employed persons (ZZP’ers) are truly independent and not hiding behind apparent self-employment or protected against sham arrangements. The law already existed, but the Tax Authority has announced that it will start enforcing from January 2025, in the run-up to a new law yet to be made. There is already a bill proposed: the Clarification of Labor Relations Assessment and Legal Presumption Act (VBAR).

Practice

The DBA Act is intended to create guidelines and mark the boundary between freelancers and permanent employees. The law led to a lot of uncertainty and administrative burdens for both clients and self-employed individuals. This was recognized by the Tax Authority, leading to an enforcement moratorium: the law was not enforced, except in cases of intentional malfeasance. This situation will change from January 2025, as the enforcement moratorium will no longer apply.

Changes from January 2025

This formally means that from January 1, 2025, the Tax Authority will fully enforce rules on apparent self-employment. Companies hiring self-employed individuals for non-independent work risk fines and back payments. Discussions are ongoing about a transition year where no (or limited) fines are imposed, provided an organization takes demonstrable steps against sham arrangements.

The ultimate goal is to combat apparent self-employment and create more certainty in the labor market, especially for distressing cases. In the draft legislation for the VBAR, the ‘legal presumption of an employment contract’ is included, stating that at an hourly rate below €33, self-employed individuals who wish to can more easily claim an employment contract. This could indicate future enforcement practices by the Tax Authority.

That the rates for legal and compliance interim professionals are significantly above the aforementioned €33 does not eliminate the possibility of a situation being interpreted as apparent self-employment. This is particularly true if an interim professional is connected to an organization or team for a long time, sometimes almost functioning as a colleague. When assessing apparent self-employment, it is not so much about the contractually made agreements—all our contracts comply with the DBA law and were approved by the Tax Authority at the time—but about their interpretation in practice.

Interpretation by the Tax Authority

The outlines for this interpretation are becoming clearer, and more information can be found on the Tax Authority’s website. Use this tool, and particularly the examples found on the Tax Authority’s website, as a guide.

What Can You Do?

For now, it’s important that as an organization you demonstrably do your best to prevent apparent self-employment, focusing on how you collaborate with interim professionals. You can agree on anything contractually, but it’s all about execution.

Current Practice of Interim Solutions

Looking at our interim practice, many of the points relevant for potential enforcement have been embedded for years:

• Our contracts comply with the DBA law and were approved by the Tax Authority at the time.
• We only work with interims who can provide a Chamber of Commerce registration and liability insurance.
• We routinely ask interims about other assignments and discuss with both parties if we suspect a risk during an extension.
• Billing is per actual hour worked.
• Hourly rates are higher than what is typically paid to an employee.
• There is no fixed payment schedule, and the interim runs debtor’s risk.
• We only mediate independent and experienced professionals, thereby ensuring a higher degree of autonomy.

What Can You Expect from Interim Solutions?

With enforcement on the horizon, we will advise more actively on entrepreneurship and how assignments are executed: autonomy regarding working hours and how work is performed, where possible steering more towards results than effort, and finally, the content of the assignment. Assignments where the expectation is that an interim professional will operate within a team for a long time, work fixed hours, and perform tasks that are also part of the fixed team members’ job descriptions—as often happens in law—will need to be structured differently in the future.

If you are unsure about whether to engage an interim professional, feel free to contact us, and we can discuss how to shape both the assignment and its execution.

We will continue to follow developments and share them. Additionally, we will soon let a specialist speak in a session of Good Morning Legal People on this topic. We will talk to Boris Emmerig. Boris is a lawyer-partner/tax advisor at Holla Legal & Tax and a specialist on this topic. Want to receive the announcement? Sign up here in advance.