Valid work permit
To work as a foreign freelancer in the Netherlands you must adhere to the Act on the Employment of Aliens (Wet arbeid vreemdelingen, Wav), which contains a set of rules. On the one hand, if you come from a member country of the EU/EEA or Switzerland, you don’t need a work permit, you will just have to demonstrate that you are in fact working as a freelancer - you have control over certain aspects of your services - which can be confirmed by the Social Affairs and Employment Inspectorate (Inspectie SZW).
On the other hand, if you come from a country outside the EU/EEA then you do need a work permit to work as a freelancer which will have to be requested by your contractor from the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV). Only freelancers with a residence permit with the endorsement “Work is freely permitted” are exempt from having a work permit.
Chamber of Commerce (Kamer van Koophandel)
When you have a residence permit, you should register yourself at the Chamber of Commerce. You will have to choose a business name. Once registered you will automatically receive a VAT number from the Dutch tax authorities. Freelancing is not a legal form in the Netherlands, therefore many people who are self-employed choose the business form of sole trader.
To work as a freelancer you must know how your business relationship with your client (employer-employee) will be regarded by the Dutch Tax and Customs Administration. This is necessary to assess who will be in charge of paying for the payroll taxes.
In 2016 the Declaration of Independent Contractor Status (VAR) was replaced by model agreements. With these agreements contractors are not obliged to pay payroll taxes when hiring freelancers for a specific job.
This new act counts with three different types of agreements under which freelancers/self-employed and their employers can work:
- General model agreements: accounts for a majority of business relationships that do not involve employment.
- Sector of profession-specific model agreements: these apply to freelancers and contractors working under sectoral or professional conditions.
- Individual model agreements: issued by specific sector or profession.
Please note that working according to a model agreement is not compulsory for neither the freelancer nor the contractor. However, in this case the client of the freelancer has to evaluate whether there is an employment relationship and pay payroll taxes in accordance to the conclusion reached. Find more information here.
Apart from the model agreements there is also the possibility of choosing the opting-in scheme in which the contractor has the responsibility of withholding and paying payroll taxes as well as social insurance contributions for the duration of the contract. If this is the case, they will have to inform the Dutch Tax and Customs Administration in a joint statement preceding the start of the work.
Taxes and administration
Like business owners, freelancers are obliged to register with the Dutch Tax and Customs Administration to establish whether they are an entrepreneur for income or turnover tax purposes.
Most of the time, freelancers will be considered as entrepreneurs for turnover tax - they must charge and pay taxes on their income. To be considered an entrepreneur with the purposes of income taxes you must meet a series of conditions. If these conditions are not met and you are not employed by your customer, your income will be regarded as incidental earnings and will not be entitled to certain tax deductions.
Most freelancers are required to charge VAT – 21% or 6%, depending on the service. Also, you will be required to fill in a VAT return every quarter. This can be very complex, so it is advisable to hire an accountant.
There are tax facilities and subsidies especially for self-employed professionals to promote entrepreneurship in the Netherlands. For more information on subsidies, please visit the governmental website.
For more detailed information on taxes and administration please visit the Dutch tax authorities website.
As a freelancer you have more risks than employees, like not having any income when unable to work due to illness or accident, or being held responsible for mistakes or damage caused.
When you work as a freelancer, you cannot claim social benefits under the Sickness Benefits Act, the Work and Income Act or the Unemployment Insurance Act. Therefore, it is advisable to take out insurance to cover these risks.
You do, however, qualify for the following national insurance schemes: General Old Age Pensions Act, Surviving Dependants Act, Exceptional Medical Expenses Act and General Child Benefit Act.
Every inhabitant of the Netherlands aged over 67 has an entitlement to receiving AOW (Algemene Ouderdomswet), a national old age pension. This is a basic pension, which may not be sufficient to live on. It is therefore recommended that you build up a supplementary pension through a pension insurance scheme. You could then take out an annuity policy or another type of savings scheme.
Every resident of the Netherlands has to take out basic health insurance. Everyone pays a premium directly to the health insurance company of your choice. Extra insurance is needed to cover various risks. Apart from the nominal premium to be paid to the insurance company, the Tax Administration collects another income-related contribution.
You can read more information about it in our Health Guide for the Netherlands.