Update: False Self-Employment And Taxation

False self-employment can result in serious tax consequences for companies and organizations that hire self-employed individuals. False self-employment refers to a situation where a contractor hires someone who is officially engaged as self-employed but in practice functions as an employee.

In the alert of 19 September 2024, we provided a legal update on legislation for self-employed individuals. This alert provides a fiscal update on false self-employment, a summary of the tax aspects thereof and potential solutions.

False self-employment & fiscal update

As from 1 January 2025, the Dutch tax authorities will fully enforce regulations against false self-employment. Companies and organizations that hire individuals as self-employed professionals for work that they do not perform independently may immediately face obligations to make corrections, fines and additional tax assessments, without prior warnings or instructions. Corrections can be applied retroactively