It is common for companies to hire self-employed people, mainly employees from countries other than where the company is based, as this is an easier way to sign a work agreement (read more about this here). However, as a self-employed person and as a company, you risk that this working relationship is very similar to an employment contract. In this case, this is called false self-employment.
Criteria for the tax authorities whether someone is false self-employed:
- Is there a relationship of authority? Is the client in charge? Does he/she determine how the assignment should be carried out?
- Are you obliged to carry out the assignment yourself? Can you not just send someone else?
- Do you receive a fixed allowance/wage (for example, per month)?
- Are you stepping out as a self-employed person or as part of the organization?
If you do not meet the criteria of self-employment, you run the following risks as a self-employed person:
- Additional assessments or correction obligations;
- Losing the tax benefits such as self-employed persons' allowance, SME profit exemption, and, if applicable, starter's allowance.
Losing the tax benefits such as self-employed persons' allowance, SME profit exemption, and, if applicable, starter's allowance.
As a company/client, you also run a risk:
- Fine and additional assessment;
- The extra work of hiring an "employee."
The topic of false self-employment is increasingly in the picture. It will come back a lot more in the future, with stricter regulations and more checks. As a company, ensure that you stay out of the picture and certainly put remote employees on the payroll via a payroll service or GEO service.
