Declaration of Independent Contractor Status (VAR)
As of 1 May 2016, the VAR is replaced by so-called model agreements. Until May 2016 a so-called Declaration of Independent Contractor Status (Verklaring Arbeidsrelatie, VAR) was sufficient proof that there was no employment relationship.In that situation, clients were not liable for any payroll taxes and contributions with regard to the self-employed professional's work.
On this page
Transitional period until January 2021
Since the new law does not work as well as planned, there will be no strict enforcement until January 1, 2021. The Dutch government is looking for alternatives to implement in the future.
Four types of VAR
There were four types of VAR. Only the VAR-wuo and the VAR-dga guaranteed your clients that they were not liable for payroll taxes and contributions. The administration decided which type of VAR you got , depending on how much (expected) profit you make, your clients, your business risk, how much time you put in your business and how you present your business. The four types of VAR were:
- Declaration of Independent Contractor Status - Profits from business activities (VAR-wuo) you got when de Belastingdienst considers you an entrepeneur.
- Declaration of Independent Contractor Status - Income from activities at the company's risk and expense (VAR-dga) you got when you are the owner and major shareholder and you run all business risks in a private company (bv in Dutch).
- Declaration of Independent Contractor Status - Results from other activities (VAR-row) you got when the Belastingdienst doesn't consider you an entrepeneur. Clients have to check whether they were liable for payroll taxes and contributions. If considered wrong, the Belastingdienst can demand taxes from you and the client afterwards.
- Declaration of Independent Contractor Status - Income from employment (VAR-loon) you got when you are a payroll employee, because for instance you have to follow orders and get paid during holidays and illness. This VAR was useless.
VAR-wuo: Indemnification and verification
After completing the income tax return, the Tax Department would assess the actual situation. It could be that your income was taxed as a result of other activities, rather than as income from business. Then you paid more tax because you had fewer tax advantages. You probably wouldn't get a new VAR-wuo but your clients were not liable to pay income tax and social contributions.
The client had to keep a copy of your valid var and your proof of identity. Both parties must be in good faith, if it turned out afterwards you could reasonably have known that you were a payroll employee, then the indemnity did not apply.
Exception for artists
Until 1 May 2016 artists could only send a bill for performing if they had a VAR -wuo. Without this VAR an artist had to be paid according to the Performance Artist's Tax Regime (artiestenregeling).