In the Netherlands, there has been ongoing debate about the position of freelancers, particularly concerning false self-employment and social security. Notably, such unrest is less prevalent in neighbouring countries like Belgium and Germany. What are they doing differently, and what lessons can the Netherlands draw from their approaches?
The Netherlands: growth and concerns over false self-employment
Since the 1990s, the Netherlands has actively promoted self-employment, notably through the self-employed tax deduction. This policy has led to a significant increase in the number of freelancers. However, many among them are considered false self-employed: individuals working as freelancers who, according to regulations, should be classified as employees. This situation disrupts the labour market, as employers pay fewer social contributions, and false self-employed individuals benefit from tax advantages. The government is attempting to address this issue by enforcing stricter regulations and phasing out certain tax benefits.
Belgium: strict regulations and social security
Belgium enforces stricter rules for self-employed individuals. Freelancers contribute 20.5% of their net taxable income to social security and are required to have disability insurance. Moreover, there is minimal fiscal disparity between employees and freelancers, as there are no self-employed tax deductions or SME profit exemptions. The relationship between a client and a freelancer is legally considered fundamentally different from that between an employer and an employee, reducing debates over false self-employment.
Germany: limiting self-employment to specific professions
In Germany, the number of freelancers is lower because self-employment is permitted only in certain professions. Occupations where individuals typically work under supervision, such as nurses or pizza delivery personnel, cannot be performed as freelancers. Additionally, German freelancers must meet strict criteria, aligning with jurisprudence from the Dutch ‘Deliveroo’ case.
Lessons for the Netherlands
Experts suggest that the Netherlands can learn from Belgium and Germany’s approaches. Belgium’s legal framework provides clarity on the status of freelancers, while Germany’s restriction of self-employment to specific professions minimizes the risk of false self-employment. Implementing similar measures in the Netherlands would necessitate a comprehensive reform of the fiscal and social security systems, a politically sensitive undertaking.
The discourse on freelancers and false self-employment is more prominent in the Netherlands than in neighbouring countries. By examining the stricter regulations and social security contributions in these nations, the Netherlands might find inspiration to reform its policies. A balanced approach that serves the interests of freelancers, employers, and society appears essential.
