17 DEC 2020

The DBA, a failed attempt to prevent bogus self-employment

Although still officially in place, the DBA law has been up for review and replacement by the Dutch government for a long time. 

Since the implementation of the DBA legislation in 2016, the authorities have been reviewing, adding and extending the regulations continuously with a view of providing clarity about the practical details of the law while still maintaining the initial premise of preventing a growing number of bogus self-employment solutions. 

By scrapping the VAR statement in 2016, the government and tax office have put the responsibility of determining whether a contractor is self-employed or an employee squarely with the contractor themselves and the end client enlisting their services. 

The initial reaction in the business world was favourable, provided that the authorities provided the public with the necessary, appropriate and approved tools to make these assessments. 

These tools were a mix of firmly established criteria, pre-approved model agreements as well an online reporting/assessment system, which when followed correctly would provide a level of certainty and risk mitigation to all parties involved. 

The initial criticism of these new regulations was the time limit imposed on self-employed assignments: 1 year maximum. 

Numerous business and branch organisations have voiced their concerns about this time limit, arguing that such assignments tend to run longer and contractors must have the freedom to choose to provide services to one end client for a longer period of time. Not only to ensure business continuity for the end client but also financial security for the self-employed. 

Despite the signals and calls from the involved parties, the government has failed to take a firm decision on the matter so far. 


The validity of the pre-approved model agreements had been set to 5 year at the beginning of 2016, meaning that the same contract can be used by parties for various self-employed assignments without the need to have it re-approved by the tax office. However each assignment is capped at 1 year.

This 5 year period is coming to an end. If the government does not officially concede to an extension of these agreements, new negotiations would need to take place between governmental and branch organisations. Considering that the branch organisations have voiced concerns about the established legislation at the time of implementation and have continuously commented on the problems of practical execution/use thereof over the past number of years, public support for further negotiations seems thin without proper concessions and proposals from the government side. 

The online reporting/assessment system that was supposed to provide a guideline for assessing contractor relationships has so far not passed beyond a testing pilot stage. The small number of available feedback from testing parties sketches a picture of a lopsided online tool, with complete disregard for a number of self-employed scenarios that occur frequently in general contracting situations, as well a tendency to suggest employment routes rather than self-employment.  So far the system seems to lack finesse and detail, showing a biased approach favouring employment. 


The government has so far not presented any concrete plans to replace the DBA legislation or work to improve the implemented regulations. 

The number of self-employed consultants has not decreased drastically as a result of the DBA. Neither has the number of employed consultants increased, which was the general expectation considering the premise of the DBA.

Even the enforcement of the legislation has been continuously postponed, except in cases where malicious intent is clearly evident. 

Considering that the legislation has been put in place to combat that exact malicious intent, this level of enforcement seems to be the absolute least the government can do to uphold the validity of their own legislation. 

According to information available to us, the relevant government authorities have carried out audits on a total of 104 companies across different business sectors in the course of 2018. It was established that over half of these companies were not following the legislation correctly. 

However only 12 of the 50 plus companies in breach of the law will be faced with follow up audits to check for progress on remedying defects in operations. No fines have been imposed on companies. 

For 2020, the tax office has assigned only 50 full time auditors to carry out investigations into compliance with the DBA. Data for 2021 is not available yet, but a drastic increase is unlikely. Considering there are over 1.4 million businesses registered in the Netherlands, albeit not all of them working under or with the legislation, the amount of auditors seems to be detrimentally low. 

The Dutch chamber of commerce has reported in 2020 that the total number of people working in a self-employed capacity, whether as zzp or small BV, amounts to 2.4 million. 

Assuming that one auditor performs the investigation of one self-employed and requires 2 days for the investigation, it would require over 200 years to audit all registered zzp/bv structures with the current number of auditors.