Employment or self-employment?

The decision and assessment framework of the Tax and Customs Administration

With the introduction of the Assessment of Employment Relationships (Deregulation) Act (DBA Act), it has become increasingly difficult for clients and contractors to obtain clarity about the nature of their employment relationship. The DBA Act, introduced to combat false self-employment, has actually caused a lot of uncertainty in practice.

The distinction between employee and self-employed person is of great importance, because it has direct tax and legal consequences. An incorrect qualification can lead to significant additional assessments, fines and even liabilities, for both the client and the contractor.

To provide more clarity, the Tax and Customs Administration has introduced a decision and assessment framework as of 1 November 2024. This framework offers clients and contractors practical tools to determine whether there is paid employment or self-employment.

The nine points of view of the decision-making and assessment framework

The framework contains nine points of view that together provide insight into the nature of the employment relationship:

1. Nature and duration of work: Long-term relationships and simple tasks are more likely to indicate employment.
2. Freedom in working hours and work location: Great autonomy indicates independence.
3. Embedding in the organization: The more the work is integrated into business operations, the greater the chance of an employment contract.
4. Personal performance: Obligation to perform the work himself without replacement often points to paid employment.
5. Reaching agreements: A lot of room for negotiation indicates independence.
6. Remuneration structure: Invoicing and self-pricing indicate entrepreneurship.
7. Level of remuneration: Higher remuneration or project-related rates indicate independence.
8. Economic risk: Bearing the risk for errors or repairs yourself indicates independence.
9. Entrepreneurial behaviour: Visible activities as an entrepreneur, such as multiple clients and market profiling, indicate independence.

Practical application

The decision and assessment framework does not offer a simple checklist. Instead, it requires a holistic assessment of all relevant facts and circumstances. No single factor is decisive in itself; It is about the total picture of the employment relationship.

Conclusion

The decision and assessment framework helps clients and contractors to gain more clarity about their employment relationship. For more information on how case law, such as the case of X BV, offers practical insights, read our earlier blog here.