The impact of the legislation can be considerable, and as a self-employed person you don't want to be caught off guard. How do you ensure that you comply with all the rules while at the same time preserving your independence? In this blog we delve deeper into the DBA Act, what the stricter enforcement means for you, and how you can prepare to limit risks and protect your working relationships.
The impact of stricter enforcement of the DBA Act for the self-employed professional
The stricter enforcement of the Wet DBA will have a major impact on freelancers and clients in the near future. The Dutch Tax Administration will more actively check for false self-employment, which means that as a freelancer you will need to structure your working relationships more precisely to prevent problems. It has long since ceased to be only about a watertight contract; it’s primarily about how the working relationship is actually carried out in practice. How much independence do you have within the collaboration? Are the agreements on paper actually being adhered to? These are important questions to answer before you enter into an engagement with a client.
Here are the main points you, as a self-employed freelancer, should keep a close eye on to comply with the DBA Act and to avoid fines or additional tax assessments:
1.Authority relationship: the Tax and Customs Administration mainly looks at the degree of independence in the working relationship. As a freelancer you must have full control over how you carry out your work. This means the client must not give you direct instructions about the working method. Make sure that agreements in the contract focus on the result to be achieved, rather than on the way you do the work. Autonomy in the execution of your tasks is essential.
2.Work and Assignment Conditions: you must as a freelancer have the freedom to determine your working hours and workplace. The client may not prescribe strict working hours or specific guidelines that resemble a traditional employer-employee relationship. This means that you must be able to operate independently and decide for yourself how and when you carry out your work.
3.Entrepreneurship: to be considered a self-employed entrepreneur, you must demonstrate that you have multiple clients and bear entrepreneurial risks. This means that, for example, you make investments in your own business and that you face the risk of non-payment. By profiling yourself as an entrepreneur and showing that you are actively working on your own business operations, you can strengthen your self-employed status.
How do you prepare yourself for the stricter enforcement?
The heightened scrutiny means that, as a freelancer, you need to proceed carefully when taking on new assignments. But how do you arrange this? We give you a few tips to ensure you comply with the DBA Act:
1.Have contracts checked: make sure your contracts are legally reviewed to ensure they comply with the Wet DBA. The contract must make clear that you work as a self-employed person, without a relationship of authority. A good contract helps you prevent legal problems and provides protection against claims of false self-employment.
2.Administration and documentation: it is important to keep detailed documentation of your work. Think of project plans, time records and communication with your client. This documentation can serve as proof of your self-employed status in the event of an inspection by the Dutch Tax Authority.
3.Clear communication:clear communication with your client is essential. Make sure both parties have the same expectations about the nature of the employment relationship. Make clear agreements about your responsibilities and your role as a self-employed person. This not only prevents misunderstandings, but also reinforces the independent nature of the working relationship.
Preparing for the future
The enforcement of the DBA Act requires adjustments from both freelancers and clients. Good preparation is essential to ensure that you comply with the law and minimize the risks. Invest in legal advice and make sure your contracts and administration are in order. By acting proactively, you can not only comply with the legislation but also contribute to sustainable and transparent working relationships in, for example, the IT sector.
Circle8 helps you with this. Whether it's advice, contract management or administrative support, we make sure that, as a self-employed person or client, you can work with confidence in an ever-changing market. Together we ensure a strong and transparent collaboration in which everyone can flourish. Want to know more, any questions? Let us hear from you via our contact page: https://www.circle8.nl/contact
