We’ve been keeping an eye on developments that could reshape freelancing in the Netherlands.
From January 1, 2025, the Dutch Tax Authorities have announced they will be keeping a closer eye on worker classification, specifically focusing on whether someone should be considered an independent contractor (ZZP’er) or an employee (in dienst). This distinction is critical because it determines tax obligations, legal protections, and social security contributions which could significantly impact freelancers and their working relationships.
Xolo has just entered the Dutch market, and this blog will highlight how these changes may impact freelancers in the Netherlands and how Xolo can help.
Which changes will potentially impact Dutch-based freelancers?
Come early 2025, the Dutch Tax Authorities will start actively monitoring and enforcing false self-employment. This means they can check with your clients whether you, as a self-employed person, are really working independently, or whether you are working in an employment relationship.
In the latter case, this is called false self-employment and instead of freelancing you should have an employment contract with your client. Here's a breakdown of what you need to know and how it may affect the freelance landscape.
The new evaluation framework for employment relationships
The Dutch Tax Authorities have introduced an updated afwegingskader (weighing framework) to help businesses and freelancers determine whether their working relationship qualifies as employment or self-employment. This framework evaluates the working relationship based on the following nine factors:
- The nature and duration of the work; What is the reason for hiring? Is it an assignment with a clear beginning and end?
- The manner in which the work and working hours are determined.
- The extent to which the work and the contractor are part of the client's organization; Do you do regular work that is part of the core activities of your client?
- Whether or not there is an obligation to carry out the work personally; Is it possible for someone else to take over the assignment from you without the involvement of your client?
- The way in which agreements were made; Was there room for negotiation, did making agreements feel like being on an equal footing with your client?
- The manner in which the reward is determined and paid.
- The amount of the reward; Did you have any influence on the amount of your rate?
- The extent to which the contractor bears commercial risk in the assignment.
- The extent to which the contractor behaves or can behave as an entrepreneur, for example: what does the contractor do to obtain assignments and a good name? How do the Tax Authorities treat the contractor? What is the number of clients and how long does the contractor usually work for a client?
The above factors are weighed to determine whether the hiring party has significant control over how the freelancer performs their work and to which degree the freelancer is functioning as a part of the hiring party’s team, rather than working independently.
An important factor here is to determine whether the freelancer is reliant on one client for the majority of their income.
If you worry whether you classify within the definitions of false self-employment, fill in this anonymous online questionnaire published by the Dutch Tax Authorities to see whether your working relationship points to an employment contract or to working as a self-employed person. For an alternative tool you can also try this one.
What do these changes mean for freelancers?
The new rules aim to combat false self-employment, ensuring that individuals working under employment-like conditions receive the benefits and protections of an employee. However, this also introduces potential challenges for legitimate freelancers, particularly those working closely with a single client or in roles with significant oversight.
Potential Impacts:
- Freelancers risk reclassification: If the Tax Authority determines that your work relationship meets the criteria for employment, you may lose the tax benefits and flexibility associated with freelancing.
- Increased compliance scrutiny: Both businesses and freelancers will need to carefully document their agreements and ensure compliance with the new framework to avoid penalties.
- Impact on contracts and negotiations: Freelancers may need to renegotiate contracts or diversify their client base to demonstrate independence and reduce the risk of reclassification.
Having the right outlook before going into a new relationship with a client can save more than just headaches. It’s important to remain vigilant in your compliance with Dutch laws, and a strong partner like Xolo can help you be the best freelancer possible.
Xolo helps freelancers navigate these changes in Dutch law
As the Dutch freelance landscape evolves, staying compliant and informed is more critical than ever. At Xolo, we specialize in simplifying business management for freelancers, so you can focus on what you do best. We think you’ll love having:
- Clear invoicing and documentation: Keep your financial records organized and transparent to demonstrate your independence as a freelancer.
- Tax and compliance support: Ensure you meet all Dutch tax obligations with Xolo’s tools tailored for freelancers.
- Expert advice: As the rules evolve, we’ll keep you updated with actionable insights and resources to help you navigate these changes confidently.
These new regulations are set to take effect in 2025 and will undoubtedly reshape the freelance landscape in the Netherlands, aiming for a fairer and more transparent system. While this may bring challenges, it also presents an opportunity for freelancers to reevaluate their work relationships and strengthen their business practices.
Launch and run your business with Xolo––the easy way!
At Xolo, we’re committed to empowering freelancers and solopreneurs, helping you adapt to new rules and thrive in an ever-changing environment. If you’re ready to streamline your business and stay ahead of compliance requirements, check out how Xolo can make freelancing in the Netherlands easier than ever.
Stay informed, stay compliant, stay independent––with Xolo.