![]() ![]() Note that this ‘guarantee in advance’ does not give a 100 percent certainty. Under the new system a certain form of certainty regarding the qualification of the relationship can be obtained by either (i) submitting the individual contract for services to the Dutch Tax Authorities and asking for a judgment regarding the qualification of the relationship, or (ii) using a template contract drafted and published by the Dutch Tax Authorities. Upon entering into a working relationship, companies will now become the party with the primary responsibility of establishing whether the relationship constitutes an employer/employee relationship. It will become more difficult to review the relationship with the self-employed contractor. As a consequence, companies may lose protection and can be held liable for payroll taxes and social security contributions. The VAR system offered a guarantee to the company that the Dutch tax Authorities considered the particular contractor an entrepreneur.ĭue to the new Act, the VAR-statements will be abolished, and as a result this guarantee no longer exists. If certain conditions were met, then designation as VAR-WUO (profits from business activities) or VAR-DGA (income from activities at the company’s risk and expense) indicated that the company did not need to withhold and pay wage taxes and social security contributions, even if the working relationship later proved to be an employer/employee relationship (excluding situations of bad faith on the part of the company). ![]() The VAR was a statement from the Dutch Tax Authorities that provided protection to the company as a commissioning party. The Act will lead to an alteration of the Netherlands’ current system with regard to the Declaration of Independent Contractor status, the Verklaring Arbeidsrelatie (“VAR”). During the transitional period the Dutch Tax Authorities will not actively enforce the new legislation, but will focus mainly on providing information. A transitional period of one year (until May 1, 2017) applies. This new legislation, the Deregulation of Assessment of Independent Contractor Status Act (Wet Deregulering beoordeling Arbeidsrelaties) (“the Act”),was accepted by the Dutch Senate on Februand will enter into effect May 1, 2016. The relationship of self-employed contractors will be substantially impacted due to new legislation in the Netherlands. There can be severe and expensive consequences, both from a tax and civil law perspective, if a contractor relationship is not properly established. The most important thing for any organization when making a decision to engage a contractor is to do everything possible to establish that there is a genuine independent contractor relationship and that the arrangement is not really an employment relationship. This may be for a variety of reasons, often because certain contractors have particular skills but are not needed on a long-term basis. Will Ongoing Contractor Relationships Qualify as Such After May 1, 2016?Ĭompanies often seek to engage contractors to perform certain services.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |