Disguised employment isn’t a new topic of conversation and has been a discussion point for governments and tax agencies for decades. Every so often countries make it a priority to consciously tackle this, as the lost revenue to the country and workforce exploitation it causes can be extremely damaging to the economic climate. It has always been notoriously hard to police, as most tax agencies just simply don’t have the resources to efficiently monitor the whole contractor market due to its fluid nature.

Historically, The Netherlands has been one of the more proactive countries when it comes to monitoring temporary labour and supply chains, to ensure that the workers are protected and functions are in place to ensure compliance.

Such rules and regulations that are enforced within the Netherlands include:

• Dutch Chain Liability law – to push liability to all entities within the supply chain should incorrect payments (or under payments) of taxes are made.
• KVK/Waadi – law requiring all entities sitting in the supply chain between the end client and the temporary contractors to register and be known to the Dutch government.
• G-Accounts – Ring-fenced bank account that can only make payments to other G-Accounts, or, to the tax authorities giving protection that a percentage of the funds must be paid as tax.

The DBA Act

More specifically, to attack the problems around disguised employment, the Dutch government introduced the “Employment Relationships Deregulation Act”  DBA Act in 2016. The Act aimed to bring clarity and criteria to the temporary labour market when assessing contractors and engaging with them in a fitting manner.

Model agreements were also released to help support self-employed engagements as well as an assessment tool designed to indicate if the temporary assignment will indeed be deemed an employed type engagement or not. However, this act hasn’t been deemed to provide enough clarity on if someone was, or wasn’t, in an employee-employer relationship.

What is happening as of January 1^st 2025

Currently (and for the last 8 years) the Tax Administration has been limited on the action they can take to investigate supply chains and the clients that are utilising self-employed workers unless there was an obvious misuse. This limitation is called the “enforcement moratorium”.

As of January, the 1^st 2025 the “enforcement moratorium” is being lifted and they will be actively reaching out to companies to ask if they currently utilise any self-employed individuals and if so, to show the evidence that assessments have been completed to demonstrate that the individuals don’t have an employee-employer working relationship. The tax administration will be able to take immediate action without any notice or warning when it is found that there are incorrect engagements of self-employed individuals and they will be able to enforce correction steps, conduct further investigations and in some instances apply fines to the supply chain.

In addition, Model Agreements (that historically are used to help support and engage self-employed workers) will no longer be available.

The introduction of the VBAR Act in January 2026

It has been largely criticised that the DBA Act didn’t have the impact expected and therefore tighter laws were needed. As of January 2026, we are seeing the implementation of the “Clarification of Assessment of Employment Relationships and Legal Presumption Act (VBAR)” to replace the DBA Act adding further criteria to determine the status of the work and the contractors engagement.

This differs from the DBA act in two ways.

• Relationship of authority. For those readers who are aware of IR35 in the UK, you may find this all too familiar. The criteria to determine a relationship of authority all revolves heavily on if the individual is under work related and organisational control during the assignment to indicate employed type working. In addition, self-employed type working would be indicated in instances where the individual has their own financial risk, isn’t completing work similar to the client’s internal staff (specialists) and even provides their own tools or equipment.

• Assumed employment relationship due to the pay. This is a very interesting element whereas if an individual is on an hourly pay rate of €33.00 or under, the contract Is automatically assumed as an employed type of role.

What should you do?

The tax administration will be merciful when initially contacting and investigating companies in the supply chain that have engaged self-employed individuals. They will likely issue fines and penalties between 1^st January 2025 and 31^st December 2025, but only to companies that have not shown they have made conscious efforts to assess and rectify any wrongful engagements. Therefore, it is imperative through the remainder of 2024 to look at your Dutch contractor book and for any self-employed/independent contractors on assignment in the Netherlands. Both you and  your clients should run assessments in line with Dutch law to determine whether you are currently working correctly with the self-employed worker/s or not.

If you find that there are any wrongly engaged self-employed contractors, a ‘transition to employment plan’ should be implemented in good time – providing you the ability to discuss with third parties what steps will need to be taken and iron out the process of each individual that will need transitioning. There are likely to be bumps in the road due to changes to NET retention and potential renegotiating of the contractual rates with clients.

It is inevitable that there will be some self-employed workers that clients and their supply chains are currently engaging, that will need to transition over to employment. In addition, any entities that are in the supply chain between the end client and the worker (intermediaries) will also want to ensure they have KVK/Waadi registration. Not having this when utilising temporary employment labour can also result in heavy fines.

Here at Liberty Bishop International, we hold NEN-certification and are registered sponsors with the IND, allowing us to provide a full range of support to all companies and contractors needing to operate through a compliant and hassle-free Dutch temporary employment service.

If you have any questions or would like to know more, feel free to reach out to one of the team who would be more than happy to discuss these changes further.