According to the hearing in the Senate of 26 January it seems likely that the Bill on abolition of the VAR will be accepted. If the Senate votes in favour of abolishing the VAR, the substituting of the VAR with model contracts will be effective as from 1 May 2016. The year 2016 (probably extended to 1 May 2017) will serve as a transition period in which independent contractors and principals will be given time to adjust their procedures and contracts to the new situation as per 1 May 2016. In this transition period the Tax Authority will not enforce but conduct supervision and issue warnings. The consequence will also be that the period of validity of existing VARs (from 2014 and 2015) will likely be extended to 1 May 2016.
This transitional period will not apply to those who cannot benefit from the new model agreements, e.g. board members of Dutch listed companies, who are considered employee for wage tax purposes on a notional basis. The companies will have to start withholding wage tax as from 1 May 2016. The same applies to members of the supervisory board of directors (commissarissen), but the State Secretary has mentioned that the notional employment for supervisory board members could probably be abolished. We feel, however, that the consequences of such a change have not been properly taken into account yet. We will have to wait for further news from the State Secretary to be sure about the future position of the supervisory board members.