DBA Act - Bogus Self-Employment

The DBA Act (Deregulation of the Assessment of Employment Relationships), intended to combat bogus self-employment, has been in place for some time, but as of January 1, 2025, the Tax and Customs Administration has begun actively enforcing this law. As a result, much of the work done on a freelance basis will be classified as bogus self-employment. Because the cultural sector relies heavily on self-employed contractors, the DBA Act will also bring about significant changes in this sector. What is the best way to deal with this?

This page provides a brief summary of what the DBA Act entails and what its implications are for clients and contractors.

What is bogus self-employment?

Pseudo-self-employment means that someone is formally classified as a self-employed person, but in reality performs the same work as a salaried employee. As a result, the self-employed person lacks important protections, such as sick pay and pension benefits, while the client saves on taxes and social security contributions.

The DBA Act was enacted to address this issue: it is intended to ensure that workers receive the protection appropriate to their situation, and that clients and contractors have clarity regarding when a relationship constitutes self-employment and when it constitutes an employment relationship.

Assessment Framework

The Tax Authority determines, based on the following circumstances, whether a work arrangement can be carried out as a self-employed person or whether it should be an employment relationship:

• Nature and duration of the work
• Context of the Work
• The Client's Business Operations
• Contract Formation
• Amount of Compensation
• Integration of the person performing the work
• Contractor's Obligation to Perform the Work Itself
• Determining the compensation and method of payment
• Degree of commercial risk for the contractor
• (Manifestations of) the contractor’s entrepreneurship

These circumstances are considered in conjunction with one another to determine whether a situation of bogus self-employment exists. The Tax Authority has a tool that allows you to conduct an initial assessment—based on 10 questions—to determine which type of contract is most appropriate.

💡 Tip: Want to be sure whether a working relationship in the cultural sector is more like employment or self-employment? Use Cultuur Connectie ’s checklist to assess your situation against the Tax and Customs Administration’s 9 criteria. Download the checklist here.

Requirements for Working as a Self-Employed Individual

The following list of requirements for working as a self-employed person comes from the Tax and Customs Administration’s website and provides specific details on the elements of the assessment framework outlined above.

• The employee decides for themselves how the work is performed and what the working hours are—not the client.
• This involves a short-term assignment or a limited number of hours per week.
• The contractor does not perform any work that is also performed by employees within the organization.
• The employee has specific knowledge and experience that is not available within the organization.
• Employees have the freedom to arrange for a substitute and can do so in practice.
• The worker is paid on an invoice basis, either by the hour or per assignment. When paid by the hour, only the hours actually worked are paid. In the event of illness, the worker receives no pay.
• The pay for the work is clearly higher than what employees in the industry are typically paid.
• The worker bears the entrepreneurial risk and makes personal investments for the job. For example, because he or she has to purchase the materials or equipment needed for the job.
• The worker presents himself or herself to the outside world as an entrepreneur. For example, by actively managing a website and taking on other jobs.
• A performance obligation has been agreed upon with the employee.

Implications for Clients

As of January 1, 2025, organizations are fully responsible for ensuring that their employment relationships are properly structured. During audits, the Tax Authority can review records dating back to that date and impose additional tax assessments, social security contributions, and fines. Since clients in particular face this risk, it is important to critically review employment relationships: which tasks are best suited for self-employed individuals, which contract types are more appropriate, and where can you collaborate with other organizations? If you continue to work with self-employed individuals, ensure a clear distinction from salaried employees. A clear overview and informed decisions in your HR policy will better prepare your organization for audits.

Impact on Contractors

Self-employed individuals are also feeling the effects: clients will increasingly seek to discuss the nature of the working relationship. If the Tax Authority does classify a working relationship as employment, this could mean that previously received tax benefits will be reclaimed. It is therefore wise for self-employed individuals to actively contribute to the discussion and clearly demonstrate their entrepreneurial status.

💡 Tip: The ACCT platform supports workers in the cultural sector and, through Oog voor Impuls, offers useful programs for employers and self-employed individuals. These include a voucher for HR advice, a subsidy for hiring a self-employed individual, or assistance with setting up a pension plan. This way, you can better prepare your organization for the consequences of the enforcement of the law against bogus self-employment.