Companies frequently engage the services of zzp workers (self-employed workers without employees). To minimize the risk of a situation that could be considered as an employment relationship by the Tax and Customs Administration (and therefore subject to income tax and social security contributions plus a fine), self-employed contractors must have a Declaration of Independent Contractor Status (VAR).
The VAR system is to be replaced by a new system. The transition from the VAR system to the new system was to have entered into effect on 1 January 2016, but has been postponed, and is now ex-pected to enter into effect as of 1 April 2016. Until then, the existing VAR system will continue to apply.
What will change?
Under the new system, clients (or groups acting on their behalf) and self-employed contractors may submit a contract for services to the Tax and Customs Administration (Belastingdienst). This can be either in the form of a contract that the client sends to the self-employed contractor, or a model contract available on the website of the Tax and Customs Administration. The model contract can be used immediately and does not require separate approval by the Tax and Customs Administration. Any other contract must first be approved by the Tax and Customs Administration, who will try to assess it within 6 weeks. Contracts submitted to the Tax and Customs Administration before 1 February 2016 will be assessed before 1 April 2016, so you are advised not to wait too long before submitting a contract.
The advantage is that just one application will provide clients with the certainty that they can contract several self-employed workers for similar work on the basis of the same contract. The new system also has benefits for self-employed contractors. The contracts can be re-used, whereas self-employed contractors currently have to apply for a new VAR declaration every year.
The Tax and Customs Administration will assess whether a client will have to pay income tax and social security contributions. Certainty regarding payment of income tax and social security contributions is conditional on the extent to which the contract reflects the actual situation.
The State Secretary for Finance, Wiebes, has announced to the Senate that he wishes to implement a three-stage transition plan to replace the VAR system.
A preparatory phase, focused on providing information and drawing up model contracts, will apply until 1 April 2016. The implementation phase will continue until 1 January 2017. During this phase, the Tax and Customs Administration will carry out inspections, but will not, in principle, use any repressive enforcement measures. This implementation phase will end on 1 January 2017, after which all parties will be obliged to work in accordance with the new system.
The legislative proposal to replace the VAR system has not yet been approved by the Senate. Despite this, the target date remains 1 April 2016.