What legal aspects are important for freelancers?

Income Tax and VAT

Freelancers are responsible for their own tax affairs, including income tax and VAT (sales tax). You pay income tax on your profit, which is your income minus your business expenses. It is important to set aside a monthly or quarterly amount for this.

Depending on your services, you have to pay VAT (sales tax) periodically to the tax authorities. In the Netherlands there are different rates, such as the standard rate of 21% and the reduced rate of 9%. Keep good records of all your income and expenses. This makes it easier to file tax returns and ensures that you meet the legal requirements.

Good bookkeeping can prevent many tax problems. For freelancers, it can be helpful to work with an accountant or tax advisor, especially if you have little experience with financial accounting.

Taking out insurance as a freelancer

As a freelancer, you are responsible for your own financial security. Insurance can provide protection in case of unforeseen circumstances. Although some insurances can be pricey, they can give you a lot of security and protection in difficult times. The following three insurances are especially important:

1. Professional liability insurance provides coverage if you make a professional mistake that causes financial loss to your client. For example, giving wrong advice that leads to loss to the client.
2. Disability insurance gives you an income if you are unable to work due to illness or an accident. Since freelancers cannot claim sickness benefits, this can be an important investment.
3. As a freelancer, you may find yourself in a legal dispute. Legal expenses insurance helps you with legal costs and can provide guidance on legal issues.

Privacy and AVG

Since the introduction of the General Data Protection Regulation (AVG) in the EU, the keeping of personal data has been more strictly regulated. Freelancers must also comply with this legislation. Be mindful of how you collect and keep personal data from clients. Think about email addresses, invoices and contact information. Make sure you secure digital data, for example with strong passwords and antivirus software.

If you process personal data, it is important to draw up a privacy policy. This shows clients how you use and protect their data. The AVG requires that you do not keep personal data longer than necessary. Make sure you have a policy for cleaning up old data. By complying with the AVG rules, you protect your clients' privacy and avoid fines that can be imposed.

General Terms and Conditions

General terms and conditions provide a legal basis and clarify the rules and agreements that apply to your services. They are part of your agreement with clients and protect you against legal risks. General terms and conditions specify matters such as liability and who is responsible for errors, damage or problems that arise during the execution of an assignment. In addition, record what the client can expect from your services and when the assignment is complete. General terms and conditions can help avoid conflicts and legal problems. They are legally binding as long as both parties agree to them.

Preventing false self-employment

Sham self-employment is a situation where you work as a freelancer but actually have the same relationship as an employee. This can lead to problems with the IRS, especially because as a false self-employed person, you may not be eligible for self-employment benefits such as tax deductions and social security. This is described in the new law DBA. To prevent false self-employment, it is important that your client-relationship meets certain criteria. Tip: also take a look at the requirements of the Waadi.

As a freelancer, it is important not to work exclusively for one client, as this can resemble employment. Make sure you perform your work independently, without direct direction from your client. This means that you decide how to handle the assignment. Also, try to avoid having your work replace core activities of the client, as a permanent employee would.

False self-employment can lead to high penalties or refunds of tax benefits. It is important to maintain a clear and independent working relationship and avoid ending up in an employee-like position.

Wet DBA and Waadi for freelancers

As a freelancer, it is essential to be aware of the Wet DBA (Deregulering Beoordeling Arbeidsrelaties) and the Waadi (Wet allocatie arbeidskrachten door intermediairs). The DBA Act regulates the employment relationship between client and contractor and helps determine whether an employment relationship exists. This is especially important to prevent false self-employment. In addition, the Waadi plays a role if you perform assignments through an employment agency. This law requires the registration of employment agencies in the Commercial Register and ensures that freelancers are not treated unfairly in the labor market. By adhering to these laws, you can limit legal risks and maintain a strong, professional position.

Payment terms

Clear payment terms are important to ensure you get paid on time and avoid payment problems. Set clear payment terms, such as 14 or 30 days from the invoice date. This ensures that clients know when payment is expected. A down payment is a good way to have assurance that the client is serious about payment. For larger projects, for example, you can require 30% upfront payment.

Add a clause about possible interest or penalties for late payment to motivate your client to pay on time. Send payment reminders when the client doesn't pay on time. Sometimes this helps prompt action. By clearly communicating payment terms, you create predictability and avoid unnecessary stress.

Striive makes freelancing easier for you

When you use the Striive platform as a freelancer, you don't have to worry about drafting terms and conditions and payment terms. Striive has already carefully drafted these important documents for you, completely tailored to the needs of freelancers and collaboration with clients. This means you can get started professionally right away, without any legal knowledge or extra costs. Striive's general terms and conditions provide a solid legal basis and clarity for both you and the client, while the payment terms ensure that you get paid on time and without fuss. This allows you to fully focus on what you do best: your profession.

Building a solid foundation

By mitigating legal risks, you protect yourself, your clients and your business interests, and you can fully focus on what you do best: providing excellent services to your clients. What legal issues are important for freelancers? These were them! Do you have more questions or can't quite figure out on your own with legislation such as the DBA Act and the Workforce Allocation Act? Please feel free to contact us, we are happy to help!

This one is also reasoned in the wrong direction, we set payment terms in consultation with the client or additional services are used, allowing them to get paid faster.

This is an informative blog about important legal aspects for freelancers. Drafting general terms and conditions and payment terms are 2 examples of them.

If you use Striive, these things are taken care of for you, but for the freelancer with informational search intent, the paragraphs on terms and conditions are valuable.

That's why I added this paragraph. This emphasizes the value of Striive, but also helps the freelancer looking for information correctly.

Ultimately (in my opinion) that's good in Google's eyes.