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Written by:
Bas Hollenberg


Parliamentary questions on Declaration of Income Tax Status for sole traders

The Social Affairs and Employment Minister on his own behalf and that of the State Secretary for Finance was recently queried by MPs on the subject of the Declaration of Income Tax Status for sole traders (self-employed workers without employees). One of the aspects raised concerned a case in which a Declaration of Income Tax Status (profits from business activities) had originally been issued only to be subsequently denied. Declarations of Income Tax Status are issued on the basis of details presented in the context of the relevant application. The Tax and Customs Administration’s assessment of the worker’s actual practice is not performed until later. This assessment may result in the tax authorities ignoring the Declaration of Income Tax Status having already been issued to the tax payer in question when considering the latter’s income tax return, or in their refusing to issue a repeat Declaration of the same kind. There is no question of the Tax and Customs Administration having stepped up enforcement in this respect.

According to the Tax and Customs Administration and the Employee Insurance Board, all in all it is fair to say that the working relationship between individual care providers who operate as sole traders within the health care sector and the admitted institution they work for complies with the criteria of an employment relationship under civil law. The fiscal upshot of this is that the worker in question is treated as an employee, with the institution being under a withholding obligation. As long as no other activities are carried out than that of mediating between the care recipient and the care provider, generally speaking there will be no reason to assume that an employment relationship is maintained between the mediation agency and the care provider.

The Minister has announced that an interdepartmental policy inquiry is shortly to be launched into whether existing legislation and regulations for sole traders and employees are sufficiently balanced, partly in view of the costs and benefits where Dutch society is concerned.

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