What Freelancers Need to Know About 2025

The year 2025 is poised to bring significant changes to the freelance landscape in the Netherlands. The Dutch Tax Administration is set to actively enforce the DBA Act (Deregulation Assessment of Employment Relationships), cracking down on “fictitious self-employment” or “schijnzelfstandigheid”. This will have a major impact on both freelancers (ZZP’ers) and the companies that hire them.

What is Fictitious Self-Employment?

Fictitious self-employment occurs when someone works as a freelancer but essentially functions as an employee. This happens when there is a strong dependency relationship between the freelancer and the client, such as when the freelancer works primarily for one client, is under their supervision, and lacks genuine entrepreneurial freedom.

What’s Changing?

Starting January 1, 2025, the Dutch Tax Administration is tightening the screws. While previously there were mainly warnings, now fines and back taxes will be imposed directly on both freelancers and clients who violate the rules. This can have far-reaching financial consequences.

How to Ensure Compliance as a Freelancer

To avoid falling into the trap of fictitious self-employment, it’s crucial to meet the criteria set by the Dutch Tax Administration. Here are some key points:

• Independence: You must demonstrably be independent of your client. This means having multiple clients, setting your own rates, and having control over your work methods and hours.
• Entrepreneurial Risk: You must bear entrepreneurial risk. This means you are responsible for your own profits and losses, and you are not entitled to employee benefits like sick pay or holiday pay.
• Visibility: You must be visible to the outside world as an independent entrepreneur. This means having your own website, business cards, and marketing materials.
• Tools and Equipment: You should use your own tools and equipment, and not rely solely on those provided by your client.
• Contracts: Ensure your contracts with clients clearly reflect a freelance relationship and not an employment relationship.

The Impact on Freelancers

These changes will force many freelancers to re-evaluate their working relationships and potentially make adjustments to ensure compliance. Some may need to diversify their client base, increase their rates, or invest in their own business infrastructure. Others may choose to transition to traditional employment or explore alternative working arrangements like cooperatives.

The Impact on Businesses

Businesses that rely heavily on freelancers will also need to adapt. They will need to carefully assess their working relationships with freelancers to ensure they are not creating situations of fictitious self-employment. They may need to adjust their contracts, offer more competitive rates, or consider hiring freelancers as employees.

The Benefits of Compliance

While these changes may seem daunting, they also offer benefits for both freelancers and businesses. By complying with the rules, freelancers can gain more security and stability, while businesses can reduce their legal and financial risks. Furthermore, a clearer distinction between employment and freelance work can lead to a healthier and more sustainable labor market.

Looking Ahead

The freelance landscape in the Netherlands is undergoing a significant shift. By understanding the changes and taking proactive steps to ensure compliance, freelancers and businesses can navigate this new reality and thrive in the evolving world of work.