As of May 1, 2016, the VAR-declaration (Verklaring Arbeidsrelatie) will be replaced by model agreements approved by the Dutch Tax Authorities for each sector or professional field. This is due to the implementation of the Assessment of Employment Relationships (Deregulation) Act (Wet deregulering beoordeling arbeidsrelaties) (the Act). As a result, companies run the risk additional tax assessments will be imposed on them by the Dutch Tax Authorities. The new system and the differences with the VAR-declaration are explained below.


As of May 1, any issued VAR-declaration does no longer have effect. A VAR-declaration indemnified companies that hired freelancers from any potential claims by the Dutch Tax Authorities for wages and social security premiums, should it (later) appear the relationship factually qualified as employment agreement. Before, if a VAR-declaration had been issued and the relationship nonetheless qualified as employment agreement, no additional tax assessment would be imposed on the company in relation to that freelancer. Any additional taxes had to be paid by the freelancer as sole risk barrier.

Whether or not the relationship between the company and the freelancer qualifies as employment agreement depends mainly on whether the following three factors are present: (i) labour, (ii) wages and (iii) authority.

Model agreements

As of May 1, companies can use model agreements that are made available on the website of the Dutch Tax Authorities. Also, companies can submit their own envisaged agreement to the Dutch Tax Authorities for an agreement vetted beforehand. Using a model agreement or having an individual contract vetted beforehand provides assurance that the relationship with the freelancer shall not qualify as (fictitious) employment agreement, provided that the agreement is actually carried out exactly as described in the agreement.

However, this does not prevent the Dutch Tax Authorities from imposing additional tax assessments on the company, should the factual relationship qualify as employment agreement. As a result, the new system provides for less assurance upfront and bigger financial risks for companies than was the case under the VAR-regime.

The factual relationship between the company and freelancers always determines whether or not payroll taxes are due and potentially with retrospective effect. One important element which is decisive in the assessment is the relationship of authority. The freelancer should to a large extent be non-restrictive in the way he performs the services. Should this not be the case, it is likely that the relationship qualifies as employment relationship and the Dutch Tax Authorities will impose additional tax assessments on the company.

Transitional arrangements

Until May 1, 2017 a transitional period applies to allow companies to adjust to the new system. During this period, the Dutch Tax Authorities will be reticently in taking repressive measures.

Should you want assistance with drawing up a suitable freelance agreement or require further information in respect of the above, please feel free to contact Maartje Govaert or Thomas Timmermans.

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