The DBA Act will apply from 1 January 2025: here's what you need to know
From 1 January 2025, the tax authorities will start enforcing the DBA Act. This requires action from both freelancers and clients to prevent risks, such as fines and additional taxes.
In this blog, we'll discuss exactly what the DBA law means, why it's being enforced, and how you can prepare for these changes.
What is the DBA Act and why is it important?
The DBA Act was introduced in 2016 as a successor to the VAR (Employment Relationship Statement) statement. The purpose of the law is to prevent false self-employment and to provide clarity about the employment relationship between client and self-employed person. This is important because in many cases self-employed workers are deployed where there is actually an employment relationship.
Why is the DBA Act enforced?
The cabinet wants to create a level playing field in the labor market. With the enforcement of the DBA Act 2025, stricter action will be taken against bogus self-employment, so that social contributions and taxes are paid correctly.
Working as a self-employed person offers benefits for both the self-employed person and the client, partly because of the associated tax benefits:
- For the client: There is no obligation to pay social security contributions and payroll taxes, as is the case with salaried employees.
- For the self-employed: Self-employed people can make use of tax benefits such as the self-employed deduction, the SME profit exemption and other relevant deductions, which has a beneficial effect on their net income.
As of 1 January 2025, the enforcement moratorium Act DBA will end. This means that the tax authorities will fully control and enforce. Both freelancers and clients can expect fines and additional taxes if they do not comply with the law.
💡 Read more about this what the DBA Act looks like as of 1 January
What does the DBA Act mean for freelancers and clients?
The DBA Act has consequences for both freelancers and clients. Where freelancers must demonstrate their independence, clients are responsible for assessing the employment relationship. Failure to comply with the rules can lead to fines, additional charges and legal complications. Here's how both parties can prepare to avoid risks.
For freelancers
- Contracts: As a self-employed person, you must ensure that agreements match the real situation. This means, for example, that there should be no relationship of authority.
- Avoiding risks: Work with multiple clients and make sure you operate visibly independently.
For clients
- Employment relationship assessment: Check that you use freelancers in a way that suits independence.
The abolition of the enforcement moratorium
As of 1 January 2025, the enforcement moratorium Act DBA will be lifted, which means that from that moment on, the tax authorities will fully enforce bogus self-employment. This means that both freelancers and clients must carefully assess their employment relationships and, if necessary, adjust them to prevent fines and additional taxes.
What does this mean in concrete terms?
- Assessment of all employment relationships: The tax authorities will actively check whether the cooperation between clients and freelancers meets the criteria for independence. This means that there must be no relationship of authority, compulsory personal work or wage payments that indicate employment.
- Consequences in case of offences: If it is determined that there is false self-employment, both freelancers and clients can be confronted with additional taxes and fines. The tax authorities can impose retroactive corrections up to a maximum of five years, depending on the situation.
Transitional period of one year
To give companies and freelancers the opportunity to adapt, there is a transition period of one year. No offence fines will be imposed during this period, provided it can be demonstrated that steps are being taken to prevent false self-employment.
Recommendations for freelancers and clients
By acting proactively and evaluating employment relationships in a timely manner, both freelancers and clients can prepare for the full enforcement of the DBA Act and the associated obligations from 1 January 2025. These are points that you can already look at as a self-employed person and client.
- Contract evaluation: Ensure that agreements reflect the actual work situation correctly and meet the criteria for independence.
- Use of model agreements: Although the tax authorities no longer approve new model agreements, existing agreements remain valid until their end date. However, it is essential that the practice matches what is in the agreement. More about this later.
- Continuous consultation: Keep in touch with clients and contractors to ensure that the cooperation meets the legal requirements and adjust them if necessary.
The future of the model agreement
As of 1 January 2025, the tax authorities will fully enforce the Deregulation Assessment of Employment Relations Act (DBA Act). This means that both freelancers and clients are responsible for correctly recording and complying with their employment relationships. A commonly used tool for this is the model agreement.
Current status of model agreements:
- No new approvals: Since September 6, 2024, the tax authorities no longer approve new model agreements. This decision was made because such agreements do not provide complete certainty about working outside employment; the actual performance of the work is decisive.
- Existing agreements: Pending model agreements remain valid until their specific end date. For some sectors, such as general care, these agreements are valid until September 30, 2026.
Key Considerations
- Actual implementation: It is essential that the practice matches what is laid down in the model agreement. The tax authorities always assess the actual work situation.
- Future developments: Although current model agreements can be used until their expiry date, it is advisable to stay up to date with new regulations and possible alternatives for establishing employment relationships.
In short, although existing model agreements are still valid for the time being, it is crucial to bring the actual execution of the work into line with them and to remain alert to future changes in legislation and regulations.
From 1 January 2025: fines and enforcement
From 2025, the enforcement of the DBA Act a serious matter. The tax authorities will actively monitor for false self-employment and abuses in employment relationships. Below you can read what this means and how to deal with it.
How does enforcement work?
The tax authorities check clients and freelancers to determine whether employment relationships comply with the rules. This is done, among other things, through a so-called book investigation, in which the client's administration is analyzed. During an investigation, the tax authorities may determine that an employment relationship has not been set up correctly and that adjustments are necessary.
Malice
At the moment, the tax authorities can already impose fines on clients who are considered to be “malicious”. This means that there are situations such as:
- A (fictitious) employment relationship.
- Obvious bogus self-employment.
- Intentional action to simulate independence.
If an audit finds that there is nevertheless an employment relationship, the tax authorities will provide instructions to correct this. To do so, clients have a period of three months to adjust the cooperation.
Assessment criteria
When auditing, the tax authorities look at the following aspects of the cooperation:
- Is there a relationship of authority?
- Is there an obligation to work personally?
- How is the remuneration arranged?
By adapting collaborations to the rules of the DBA Act, clients and freelancers can prevent fines and additional taxes.
Fines and additional charges
In case of violation of the rules, the following penalties may be imposed:
- For clients:
- Additional payroll tax and social security contributions.
- Possible fines if it appears that there is false self-employment.
💡 Calculate whether someone employed or self-employed is the best fit with this tool.
- For freelancers:
- Fines for abuse of self-employment status.
- Possible reimbursement of tax benefits received.
Transition period in 2025
The year 2025 is considered a transition period in which no offence fines are imposed, provided that:
- Both parties demonstrate that they are taking steps to comply with the rules.
- There is a clear effort to prevent false independence.
With a clear understanding of how enforcement works and what the consequences are, you can take steps to avoid risks. Make sure your employment relationship is transparent and in line with the DBA Act is so you can enter 2025 without worries.
As a self-employed person, how do you deal with the DBA Act?
The enforcement of the DBA Act from 2025 requires the preparation of freelancers. It is important to critically assess your working methods, agreements and administration in order to meet the requirements for independence.
Below, we discuss practical tips and possible alternatives to avoid risks such as fines or additional taxes. This ensures that, as a self-employed person, you are well prepared for the changes.
Tips for freelancers
- Work with multiple clients: This shows that you are not an employee.
- Be prepared for checks: Make sure your administration is in order and meet the criteria for independence.
What are the alternatives?
Consider legal advice if you are unsure whether your way of working meets the requirements of the DBA Act.
Conclusion
The DBA Act will bring major changes for freelancers and clients from 2025. By taking action now, you can avoid fines and additional charges. Make sure your employment relationships and contracts comply with the requirements of the law and stay up to date with new developments.
Do you want to make sure that your collaboration complies with the rules? Contact us for advice.
The DBA (Deregulation Assessment of Employment Relations) Act determines whether a self-employed person really works independently or whether there is a disguised employment relationship. The law replaces the old VAR and should prevent bogus self-employment.
From 1 January 2025, the tax authorities will actively enforce. This means that freelancers and clients run the risk of fines and additional taxes if it appears that they work together as if they were an employee, without recording it correctly.
Together, check whether the cooperation meets the criteria for independence, adjust agreements where necessary and work with multiple clients. Make sure the practice matches what's on paper.
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