Freelancers, known in the Netherlands as ZZP'ers (zelfstandige zonder personeel or "independent with no staff") are self-employed expat or Dutch entrepreneurs who are not committed to any single long-term client or employer. The most common business structure for a freelancer's enterprise in the Netherlands is an eenmanszaak (one-person business).
Here is an overview of the things you need to be aware of when setting up your freelance business in the Netherlands.
How to become a freelancer in the Netherlands
The flexibility of freelancing is enticing, and working for yourself can create a world of opportunities, but there are many administrative issues which freelancers must take care of themselves. These include:
- Residence permit
- Business registration
- Taxes & BTW
- Administration
- Defining your labour relationship with clients
- Insurance and pension
- Business plan and other issues
Residence permit
To start the process you must first ensure that you have a valid residence permit which allows you to live and work in the Netherlands.
Register your business at the KvK
The first administrative step to becoming a freelancer is to register your new business at the Dutch Chamber of Commerce (Kamer van Koophandel or KvK). Being a freelancer or ZZP'er has no specific legal form, so you will need to choose a legal form for your business. The kind you choose depends on your juridical and financial preferences.
Freelancers with a high turnover and/or investors may opt for a BV (limited company), however, it requires more financial and administrative resources. Freelancers who work together might choose a VOF (general partnership).
And then there's the eenmanszaak (sole trader or one-person business), the most common legal structure used by freelancers in the Netherlands. Here's an overview of all business structures in the Netherlands.
Registering an eenmanszaak
First, select and complete the eenmanszaak form on the KvK website. Forms for all legal structures are available in both English and Dutch. You can fill out the form on screen and then print it in both languages. Writing in the free text fields, such as the description of your business activities, must be translated into Dutch.
Once your form is complete, schedule an appointment to visit your local KvK via the appointment page (afspraak maken). When you have your appointment at the KvK you will need to bring:
- Your completed form.
- Your business address and contact details (and rental contract if applicable).
- Valid ID (passport, residence permit or Dutch driving licence).
- A payment of 50 euros.
It’s possible to check existing business names (you can register more than one) on the KvK’s search page (in Dutch).
Once you are registered you will be given a KvK number for your business. This number will need to be used on all of your business's invoices and outgoing post.
Liability with an eenmanszaak
It’s very important to note that with an eenmanszaak there is no distinction between private and business assets. This means that if you run up debts in your business then creditors have the right to claim your private property.
It is therefore essential that you are prepared to run your freelance business in a responsible manner. Finding a good tax advisor to maintain your administration is one of the best ways to do this. For help with tax and administration check out our listing of expat-friendly tax advisors and accountants.
Dutch taxes and BTW for freelancers
While registering with the KvK, you should also ask to be registered with the Belastingdienst (Dutch tax office), which will issue you with a BTW nummer (VAT number).
The Dutch tax office collects tax on all products and services sold in the Netherlands. They do this by requiring all businesses to add BTW tax (usually 21 percent) to their sales.
The tax office then collects this tax four times a year via the VAT declaration (BTW aangifte). If you have a freelance business then you will also be collecting for the tax office.
What does the BTW mean for freelancers?
- When you invoice clients for your services or products, you will need to add an additional 21 percent BTW tax on top of your regular fee. This additional money must be set aside as you will be required to pay it to the tax office within the next few months.
- Every quarter you (or your accountant) will calculate your VAT declaration and transfer the BTW you have gathered to the tax office.
- You can deduct BTW from business-related expenses such as materials, costs for transportation or equipment.
- Under the small business scheme (kleineondernemersregeling) if you collect under 1.883 euros BTW per year (after deductions) then you will pay less or no BTW to the Belastingdienst.
- If you do not submit the VAT declaration on time, or if your payment is late, then you will receive a fine.
Freelancing and your income tax return
Doing your annual income tax return is slightly more complicated when you are a freelancer compared to an employee because you will have to calculate your tax independently. That is why a good accountant is essential.
Tax breaks for new businesses
On the positive side, there are several tax breaks, collectively known as the ondernemersaftrek (entrepreneurs’ deduction), that are available for new businesses in their first few years.
Business-related deductions
As a self-employed person, you can also deduct work-related costs from your annual income. This includes materials and equipment, travel and study expenses, services related to your business, workspace leasing costs or part of your rent if you work from home.
Freelance administration
As a freelancer, you will be required to maintain your business administration. This is not just invoices and bills but also a record of hours worked. Keeping track of your hours is important because it can make you eligible for some of the tax breaks. For example, to be eligible for the zelfstandigenaftrek (private business ownership allowance), freelancers must work a minimum of 1.225 hours per year in their new business.
Define your relationship with clients
The issue of labour relationships has recently undergone legislative changes. Labour relationships are important because the Dutch tax office uses them to determine if a freelancer is independent or not. If a freelancer is found to be too dependent on one client then the Dutch tax office may determine that they should be in paid employment.
The Dutch tax office needs to know the nature of the working relationship to help determine who, out of the client and the freelancer, is financially responsible for the freelancer’s social security premiums such as unemployment benefits or pension contributions.
Old system: VAR (Verklaring Arbeidsrelatie)
Previously freelancers had to apply for a labour relationship declaration from the tax office. The tax office would then assign them one of four types of VAR:
- VAR-loon (Verklaring arbeidsrelatie-loon uit dienstbetrekking)
- VAR-row (Verklaring arbeidsrelatie-resultaat uit overige werkzaamheden)
- VAR-wuo (Verklaring arbeidsrelatie-winst uit onderneming)
- VAR-dga (Verklaring arbeidsrelatie-inkomsten uit werkzaamheden voor rekening en risico van de vennootschap)
This system was found to have several drawbacks as companies used it to avoid paying social security premiums for freelancers who were effectively employees. ZZP'ers often did not agree with the declaration they received, as it affected their employability, and some arrangements only protected the client, not the contractor.
As of May 1, 2016, it is no longer possible to request a VAR.
New system: DBA model contracts
On May 1, 2016, the Dutch VAR system was replaced by a new system of model contracts (modelovereenkomsten). Under the new deregulatory law known as DBA (Deregulering Beoordeling Arbeidsrelaties), freelancers and their clients are expected to discuss and sign a contract that defines their working relationship.
The Dutch tax office website provides template contracts for general and individual work agreements, as well as per sector and profession. The contracts can be found (in Dutch) on this Belastingdienst search page. In order to find the template contracts, you need to fill in the following:
- Doelgroep: Ondernemer
- Onderwerp: Modelovereenkomsten
- Belastingjaar: Jaaronafhankelijk
Each contract template has a clear explanation for which professions and situations it should be used. These contracts are free for use by both client and freelancer and can be customised in certain areas.
The basic purpose of this new arrangement remains the same as the VAR. By agreeing on a model contract, client and contractor clarify who is responsible for paying the freelancer's social security premiums, if applicable.
Transitional period
From May 1, 2016, the Dutch government instituted a transitional period of one year. During this phase, freelancers and clients have the time and flexibility to adjust their agreements and no action will be taken by the government (with the exception of extreme cases of fraud). Starting on May 1, 2017, the Dutch tax office will monitor the contracts.
Changing from VAR to model contracts
If you have a VAR from 2014 or 2015 and you will continue to do the same work for the same clients under the same conditions, you can continue to use that in 2016. If you currently don’t have a VAR you can instead use a new model contract.
Create your own model contract
It’s possible to write up your own model contract as well. Prior to entering into a contract with a freelancer or ZZP'er, a company will be able to send the new model contract to the Belastingdienst for approval.
A client and contractor are not required to submit their model contact to the Dutch tax office, however. The advantage of using one of the official contracts or getting one approved is that it guarantees that the client will not be held responsible for payroll taxes and contributions.
Insurance and pensions for ZZP'ers
As a freelancer, it is advisable to take out income insurance in case of sickness, injury or unemployment. Not all freelancers, however, are able to afford it. Cover may be expensive but it's useful if you are not entirely sure that you will have a steady stream of income throughout the year.
As a freelancer it is also important to take responsibility for your own pension since the only contributions going towards your retirement will be payments that you deliberately set aside yourself. Thinking long-term, it’s wise to investigate the Dutch pension system for a collective pension fund you can join (Pillar 2) or an individual pension product (Pillar 3) that you can invest in.
Business plan and other issues
Last but not least, if you’re preparing to be your own boss it’s essential to put together a business plan and strategy for finding clients and promoting your services. This might include creating a website, attending events or investing in advertising. In the long term, it's also a wise move to learn Dutch, as this will not only make your administration easier - especially when you deal with the Belastingdienst and KvK - but it will also help you to reach more Dutch clients and provide them with a better service.
