On 2 February 2016 the Senate passed the Deregulation of Assessment of Independent Contractor Status Act (Wet Deregulering Beoordeling Arbeidsrelaties: ‘Wet DBA’). As of 1 May 2016 the VAR will be abolished. The period until (expectedly) 1 May 2017 will be considered an implementation period during which the independent contractors and their principals will have the opportunity, if necessary, to adapt the contracts and working practice. During this period the Tax Authority will monitor developments, but will not enforce repressive measures, provided that parties actively reconsider the existing work relations.

Our comments

In spite of  the initial objections of the Senate against the abolishment of the VAR, the Senate has passed the bill and the VAR will be abolished by 1 May 2016. From that date, principals will no longer be protected by the VAR and for each separate work relation it will be necessary to determine whether or not a (fictitious) employment exists. We will have to wait for further developments concerning (among other things) the Model contracts published by the Tax Authority, the promised civil law evaluation of the Model contracts and the abolition of the fictitious employment for the supervisory board member as announced by the State Secretary of Finance.