Self-employed individuals and model agreements in 2021

Self-employed individuals and model agreements in 2021

29 April, 2021

The employment relationship between contractors and clients is not always clear. Model agreements approved by the Dutch Tax and Customs Administration are often used in practice to show work is being done outside the scope of employment. But the term of these model agreements has expired or is about to expire. How will you show in future that you are working outside the scope of employment or hiring someone outside the scope of employment? 

Consequences of the expiry of model agreements

Besides providing certainty about the employment relationship between the client and the contractor, the model agreement also offers the client an indemnity. However, this indemnity against payroll taxes applies only if various conditions are met. One condition is that the parties must actually work in accordance with the agreement in practice. The Amsterdam Court of Appeal recently repeated this condition.

Future of model agreements

When the term of the model agreement expires, the client’s indemnity also officially ends. Despite the expiry of the term, you can continue to use the model agreements as a client in the future.

In November 2020, the Supreme Court of the Netherlands ruled that the parties’ intention when entering into the contract is no longer considered for classifying the agreement. In response to this ruling, it was decided to amend the model agreements on this point. The agreements now contain highlighted characteristic provisions that the parties may not change when they enter into the agreement. These highlighted provisions are important for the Tax and Customs Administration to be able to assess whether an employment contract exists. The provisions relating to the parties’ intention when entering into the agreement are highlighted. If there is a request for an extension or a new request to approve a model agreement, the Tax and Customs Administration will no longer include these provisions as highlighted provisions when assessing the agreement. The client and the contractor can obviously include the provision that the parties have no intention to enter into an employment contract in their agreement. This is often useful for interpreting the other provisions of the agreement.

Web module instead of model agreements

The government has also had a web module developed for assessing employment relationships. This web module, in the form of a questionnaire to be completed by the client, clarifies the employment relationship between the client and the contractor. Although the web module is available as a pilot project until mid-2021, its outcome has no legal effect for the time being. At the end of the pilot project, the government will evaluate the web module and decide whether to continue with it.

More information

For questions about using model agreements or other agreements for hiring workers, contact our Employment Taxes & Global Mobility team. We are always happy to help.

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