Effective 1 May 2016, the VAR will definitely lapse. From now on, it will become possible to work with model and sample agreements that are pre-approved by the Dutch Tax Authorities. If work is in fact undertaken in accordance with such an agreement then the client in advance has the certainty that no payroll tax and social security premiums have to be withheld and paid.

Tip:The Dutch Tax Authorities has since posted various general model agreements, sample agreements and individual agreements on its website. New agreements will regularly be added to this over time.

It is also possible to work with a personal agreement that has not been approved by the Dutch Tax Authorities. In that case the client does not have any indemnification. The client will then have to determine whether or not the arrangement constitutes an employment relationship and, if so, must withhold and remit payroll tax and social security premiums on the work performed by the contractor.

Adaptation period of one year

An adaptation period applies from 1 May 2016 to 1 May 2017. This means that clients and contractors have one year to adapt their method of work to the method of work set out in a model or sample agreement. Until 1 May 2017, they both are obliged to shape the working relationship such that the work is performed without there being an employment relationship.