Model agreements are often insufficient

Model agreements from the Tax and Customs Administration are intended to provide certainty that there is no employment relationship between the client and the self-employed professional — but in practice, they often fail to offer that certainty. This is because the Tax and Customs Administration looks at the actual situation, not just the written agreement, and applies a strict interpretation. Consequently, a model agreement is often insufficient. Below, you can read why and what a better alternative is.

What are model agreements?

Model agreements are standard contracts from the Tax and Customs Administration, stemming from the Deregulation of Assessment of Employment Relationships Act (DBA), which replaced the VAR. Clients and self-employed professionals can use them (although it is not mandatory) to document that there is no employer-employee relationship. If working under a model agreement, the parties should be exempt from the obligations associated with employment, such as payroll taxes. TODO_VERIFY: the system surrounding model agreements and the DBA Act is undergoing significant changes — check the current state of affairs and enforcement policy at the Tax and Customs Administration.

The irony: rejected after all

Despite their purpose, a large number of model agreements are still rejected: the Tax and Customs Administration rules that an employment relationship exists after all, with far-reaching consequences. This rightly raises questions about the effectiveness of the system.

Why are they being rejected?

The Tax and Customs Administration looks not only at the model but also at the practice. If agreements are made that are subsequently not adhered to, an employment relationship may still arise. An additional problem: the Tax and Customs Administration does not keep statistics on why it deviates, resulting in a lack of clarity.

Further bottlenecks:

• A lack of flexibility and a strict interpretation of concepts such as authority, personal work, and wages — minor deviations inherent in dynamic practice — can already lead to classification as employment ;
• a one-size-fits-all approach that does not do justice to unique situations;
• The templates often do not contain all the legal provisions that parties really need, because they are not custom-made.

Frequently Asked Questions

Am I required to use a model agreement?

No. Its use is not mandatory. A tailor-made agreement that aligns with practice often offers more certainty.

Does a model agreement provide certainty against additional assessments?

Not automatically. The Tax and Customs Administration looks at the actual implementation. If the practice does not align with the document, an employment relationship may still be assumed.

Why does the Tax and Customs Administration reject a model agreement?

Usually because the factual situation points to authority, personal work, and wages — characteristics of an employment relationship. The strict interpretation leaves little room.

What is a better alternative?

A tailor-made agreement that meticulously meets the requirements and takes your practical situation into account reduces the risk of rejection.

Avoid problems with a tailored agreement

We draft agreements that meticulously meet the requirements of the Tax and Customs Administration and take practical realities into account, thereby reducing the risk of rejection. We also mediate and litigate in disputes with the Tax and Customs Administration.

View our employment law or schedule a no-obligation intake consultation.