Work is currently in progress with respect to the proposed legislation which could affect the group of self-employed. In the foreseeable future, legislation will be proposed after which this legislation will be posted on internet for consultation purposes. The expectation is that after this consultation the new proposed legislation will put to vote around the summer of 2020 in the House of Representatives and subsequent the Senate.

One of the pillars of this new proposed legislation is the introduction of a mandatory disability insurance for the group of self-employed. 80% of the group of self-employed is not insured against disability. The reason for this is the substantial high amount of costs to get insured. The average year premium for an insurance should cost around EUR 3,000. According to the Minister of Social Affairs and Employment Mr. Koolmees, this is caused by the fact that just a small group of self-employed is insured. It is estimated that with the introduction of the mandatory insurance the premium should be reduced substantially. A Commission has been set up to investigate the above and will present its conclusions before 1 November 2019. Other parties have also been consulted.

Another pillar is the introduction of a mandatory minimum rate that should be applied by the group of self-employed. According to the proposed legislation, this rate should amount to EUR 16 per hour and which should be in accordance with the social minimum and which should create a level playing field. Furthermore, work is also in progress with respect to “artificial” self-employment. Where a couple of years ago, the VAR (“Verklaring Arbeidsrelatie” which is the Declaration of Independent Contractor Status) has been introduced, the current proposed legislation will introduce other declarations for the group of self-employed as the “zelfstandigenverklaring” (declaration for self-employers) and/or an “opdrachtgeversverklaring” (a client’s declaration). Most probably this legislation will come into force as of 1 January 2021.

Another change that has been proposed earlier on Prinsjesdag with respect to the tax plans for the year 2020, is the reduction of the self-employed deduction with respect to the personal income taxes. This deduction will be reduced from EUR 7,030 in 2020 up and till EUR 5,000 in 2028. However, according to the current proposal, the (self) employed person’s tax credit will be increased and should, most likely, not have negative tax consequences for the group of self-employed.

Furthermore, the proposed legislation also includes a change of the tax rates for personal income taxes. As of 1 January 2020, only two tax scales should apply instead of the current four. In case of taxable income up and till EUR 68,507, a tax rate of 37,35% should apply. In case of taxable income that exceeds this amount, a tax rate of 49,5% applies to the income that exceeds EUR 68,507.

In the next couple of months, Verberne Consultancy will follow these and other developments on behalf of you and will inform you about this. In case you have any questions about this and/or other subjects, please feel free to contact me.