Old legislation revived; Tax Authority are going to punish sham self-employed workers again

On May 25, 2024 an article appeared in the Financieel Dagblad with the following title: ‘Action against sham constructions threatens to cost companies’. In this post we will update you on the most recent developments surrounding sham self-employment.

The government aims to create a more level playing field between employees on the one hand and the self-employed on the other, especially when it comes to their protection. This requires tightening rules and improving the enforcement on sham self-employment. This enforcement task lies with the Tax Administration. Currently there is a so-called “enforcement moratorium,” which means that there is actually no enforcement. This is expected to change in the near future. Now the question arises, what does sham self-employment mean and what does it mean for principals?


Sham self-employment can arise in the situation where a “worker” is formally self-employed, but in practice has the characteristics of an employee. In 95% of cases, it is clear who is working outside employment and who should actually be employed, according to Evert Verhulp, professor of employment law at the University of Amsterdam. The problem lies in the remaining 5%, these are workers who believe there are great advantages to being self-employed; after all, for every penny earned, a self-employed person keeps more than someone with a similar job who is employed. A self-employed person does not have to pay payroll taxes and contributions and enjoys rather generous (expense) deductions.

On the other hand, employers pay far fewer premiums and taxes when they employ a self-employed person, and self-employed persons enjoy less protection in the event of dismissal or illness, for example. This makes for a perceived advantage by both parties, but in practice this can end up being a false advantage.

The Netherlands now has about 1.26 million self-employed workers, which is considerably more than surrounding neighbouring countries. It is complex to determine how many sham self-employed people are among them, but rough government estimates range from 200,000 to a 500,000. The existence or absence of authority can be considered the decisive difference between a contract with a self-employed person and an employment contract.

An old law is being revived

On May 1, 2016, The Deregulation of Assessment of Labor Relations Act (The DBA Act) was passed, with the aim of combating sham self-employment through model agreements between clients and contractors. These model agreements were supposed to provide clarity on the nature of the employment relationship. However, the DBA Act encountered much resistance and uncertainty in practice, both among clients and contractors. This ultimately led to a delay in enforcement by the Tax Authorities, which also made the DBA Act ineffective in practice.

However, as of January 1, 2025, the Tax Authority will (again) comprehensively enforce the use of self-employed persons working as sham self-employed persons, according to the Tax Authority. This should bring an end to a period of more than eight years in which parties could largely go their own way and in which fines and retrospective assessments failed to materialize.

Moreover, a new legislative proposal has been submitted in this context, the Clarification of Assessment of Employment Relations and Legal Presumption Act. The primary purpose of this legislative proposal is to prevent sham self-employment. Outgoing Minister Karien van Gennip of Social Affairs and Employment has informed the Senate that introduction of this Act in early 2025 is unrealistic. The intended effective date of this proposal (if passed), is January 1, 2026. We previously informed you about this.

Until then, it is advisable for an employer to critically assess the employment relationship with a self-employed person. If an employment relationship wrongly does not qualify as (fictitious) employment, an employer is currently not yet faced with an additional tax assessment, but given the upcoming abolition of the enforcement moratorium, this will not be without consequences for long.

We will keep you informed and would be happy to think along with you. If you have any questions, please do not hesitate to contact us at We are happy to help!

Cathelijn Derks

Published On: 2 July 2024

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