A Declaration of Independent Contractor Status (Verklaring Arbeidsrelatie, VAR) is proof for clients of self-employed professionals (zzp’ers) or freelancers that they will not be held responsible for any payroll taxes with regard to these professionals working for them. With this VAR-declaration the Dutch Tax Administration states that they consider you an independent entrepreneur or a payroll employee.
In 2016, most likely as of 1 May, the VAR will cease to exist. The VAR will be replaced by model agreements accepted by the Tax Authorities in advance. There will be general and individual model agreements, as well as model agreements per sector and profession. However, the purpose remains the same: by concluding a model agreement, both client and contractor know who will be responsible for paying payroll taxes.
During a transition phase, between 1 May 2016 and 1 May 2017, clients and contractors will be able to amend their agreements and work relations in order to achieve the desired result. It is expected that Dutch parliament will adopt this legislation today, based on negotiations between parliament and State Secretary of Finance Wiebes last week. The Dutch Tax Authorities will be ‘restrictive’ with imposing sanctions in case the new model agreement legislation has not correctly been implemented by contractors and their clients before 1 May 2017.
Finally, please note that setting up a business may in certain cases be impossible from an immigration point of view, please contact us for more information.