New rules may affect temporary workers in the Netherlands

Approximately 1.8 million workers are classed as self-employed or Zelfstandig Zonder Personnel (ZZP’ers) in the Netherlands, a figure that has risen steadily over the last 20 years. This group of people far more diverse that you may think – from parcel and food delivery workers, hairdressers and builders to large numbers of IT consultants working on tech projects. Freelancers across the world face many of the same issues, but in the Netherlands, they must abide by regulations that are significantly more complicated than elsewhere and it’s looking very likely that there will be new guidelines in the near future.

In the UK and the US, for example, freelancers typically have to file taxes once per year. In the Netherlands, however, this is done quarterly alongside paying VAT. Then there’s the employer share of health insurance that must be paid on top of regular premiums. Now there’s another new policy, meaning that many freelancers have to pay their annual income tax over a year in advance, based on estimates calculated by The Tax and Customs Administration, known as Belastingdienst.

Dutch lawmakers have devised stricter policies for freelancers with the aim of tackling ‘pseudo self-employment.’ In certain cases, personnel should rightly be considered as regular employees, but these decisions may also affect genuine freelancers.

Leroy Watson, Associate Director at Corecom Consulting B.V. tells us:

“It’s clear that the measures towards ZZP’ers are getting tougher. Tax breaks are being reduced and freelancers will soon have to start paying tax on revenue they’d previously been allowed to set aside tax free for their retirement. So this is likely to make it less attractive to be a freelancer in the Netherlands.”

Based on case law, the cabinet is now trying to find a balance between the three main elements that can be used effectively in practice:

1. material authority
2. embedding of the work
3. self-employment

This should make the distinction between working ‘in the service of’ and working as an independent entrepreneur much clearer. But it seems that, in many cases, it will be deemed it is ‘ embedded work’ that is being performed. In practice, the dividing line between the two is very thin and definitely the case in service organisations. As a result, if it’s up to the cabinet, this type of work will no longer be possible in the near future.

These sentiments are also echoed by King Willem-Alexander who said that ‘permanent jobs should be the norm’ in his annual Budget Day speech in September 2022. Despite the increased regulation, many remain unwilling to hang up their freelancing hats. Research has indicted that ZZP’ers aren’t self-employed primarily for the money, but because they want the freedom to work how, when and where they want to and for clients they want to work for.