The Employment Relationships (Deregulation) Act (DBA) comes into force on 1 May 2016. This legislative change means that the Declaration of Independent Contractor Status (VAR-declaration) is abolished. Our employment law colleagues have previously written about the employment law aspects of this but there is also important news in the field of Intellectual Property and IT law.

Abolition of the VAR-declaration
The VAR-declaration offered clarity to clients on the employment relationship with freelancers and other independent contractors such as the self-employed worker without employees (zzp’er). It was after all important to know whether or not a client should pay withholding taxes for the freelancers it was engaging.

Tax Authorities Model agreement after 1 May 2016
In replacement of the VAR-declaration, freelancers and clients can now enter into an agreement which sets out the nature of their relationship more clearly. The recording of such an agreement is in particular driven by tax aspects.

On its website, the Tax Authorities have placed a number of model agreements for each profession which can be used by freelancers and clients. The use of the model agreements is not compulsory according to the DBA Guideline. However, the Tax Authorities states on this issue:

“If you do not work with a model agreement or an agreement assessed by us, your client must determine whether or not there is an employment relationship and whether or not it has to pay withholding taxes.”

These agreements are apparently assessed by the Tax Authorities on relevant tax provisions. The website states: “As long as you and your client work in accordance with these model agreements, your client can be sure that they do not have to pay withholding taxes.”

This means that many clients who would want to be sure that they do not have to pay any withholding taxes, for the sake of convenience are going to work with the model agreement ‘approved’ by the Tax Authorities or will be provided with such by the zzp’er they have engaged. After 1 May 2016, the use of the model agreement offers clients maximum tax certainty. They will therefore be more inclined to sign the model agreement.

The question is however whether the indiscriminate acceptance of the model agreements is wise for clients from an IP/IT point of view.

Please note: IP-rights of clients are not safeguarded in the model agreements

In principle, the rights to the work created by a zzp’er remain vested in the zzp’er even if they carry out the work on instruction of the client and the client pays a (substantial) fee for this. If the client wishes to acquire the intellectual property rights to the work created by the zzp’er, the zzp’er must transfer these in writing to the client. This not only applies if the zzp’er is engaged to prepare design drawings or texts for example, but also if they write software. The main rule is after all that the creator (the zzp’er) remains the entitled party unless otherwise agreed. The legislative system (see article 2 Copyright Act) requires that the transfer of copyrights takes place in writing by means of a deed signed by the parties.

It is also quite common for clients to demand (in advance) from the engaged zzp’er that they transfer their intellectual property rights (and waive their personality rights). This is in the interest of the clients. They will want to have the full copyright, in particular in the event of customised work. If this is not the case, then in principle every amendment or expansion of the work (of the software for example) would require new permission from the zzp’er.

Model agreement for software developers
How are the IP-rights dealt with in the model agreements of the Tax Authorities? Clause 5 of the “Model agreement for software and game developers” of the Tax Authorities states, in brief, that the IP-rights remain with the freelancer:

“5.1 In exchange for the full payment of the Fee, XXXX grants the Client the rights to use the results of the Work and the incorporated parts, such as music and graphics:

  1. for the indefinite period;
  2. for use via the internet,
  3. intended for the Netherlands.”

The intellectual property rights are therefore not vested in the client. The client only acquires a licence. Although this largely fits in the statutory system it is, as stated, not often in the interest of the client. In addition, this model agreement contains important licence restrictions in article 5.1. The client acquires only a limited user right to the results of the instruction: for instance: according to the model agreement, the client may only use the work of the freelancer in the Netherlands. For software this might quickly be an unacceptable restriction. In addition, the user right is limited to ‘use via the internet’. Software is increasingly only offered online but for locally operating software this limited user right will therefore not be adequate.

Clause 5.2 determines that the use of the results by the client ‘for other purposes than set out above (5.1) or during a longer term’ is only permitted after the previous written consent of the software developer. This shows that the model agreement indeed intends to grant a limited user right. Read in conjunction with clause 5.1, this opens the door for demanding an extra payment which will often not be desirable for clients.

Model agreement for ICT professionals
The model agreement for ICT professionals (part of the ‘Model agreements for sectors and professions’) contains a comparable provision but with an option to transfer (see Annex 1 to the model, clause T):

Paragraph 1 The agreement does not seek to transfer any intellectual property rights. All intellectual property rights remain vested in the party which contributes such to the performance of the agreement. The Contractor hereby grants the Client a non-exclusive right to that which has been specifically developed in the context of the performance of the agreement for the Client.


Paragraph 1 The Contractor hereby transfers all the intellectual property rights to everything that has been developed, designed or produced by them in the context of the performance of the agreement to the Client, which transfer the Client hereby accepts.


Paragraph 2 Insofar as the Contractor himself contributes tools to the performance of the agreement, they ensure that they have the correct licensing rights for the performance of the agreement. Insofar as the Client is responsible for making the tools available for the performance of the agreement, the Client ensures it has the correct licensing rights for the performance of the agreement.”

Although in this model, the clients may opt for the transfer of the intellectual property rights, this still does not optimally guarantee the position of the client. After all, if the zzp’er is indeed more or less at liberty to carry out his or her work, the client would be wise, in addition to the transfer of all rights (to the software, the source and object code and associated material), to insist that the creator waives all his personality rights. In addition, clients would be well advised to include in the agreement that the zzp’er indemnifies the client against claims asserting that the software or the exploitation of such infringes the (intellectual property) rights of third parties and that it will also be fully compensated for all costs and loss suffered as a result of such claims. The model agreement of the Tax Authorities does not refer to such an indemnity and compensation arrangement.

It remains guesswork to understand why the Tax Authorities has included the arrangements in the different model agreements in this manner. Firstly, they do not appear to be compulsory as it does not concern the so-called ‘marked text’. Secondly: the division of IP-rights relating to software does not appear in itself decisive or of importance for the determination of whether or not withholding taxes have to be paid. Thirdly, the regulations concerning IP-rights are not included in the DBA Guide and are therefore not important for the determination of whether or not an authority relationship exists. Fourthly, the demand of the contractor that the IP-rights are transferred in my view implies that there actually is no authority relationship. Otherwise the transfer is not required. If this were different and the persons having developed the software were ‘in employment’ on the basis of an employment agreement, then article 7 Copyright Act could be relied on. This states – in brief – that the copyright is vested in the employer. Finally, the contractual provisions are different; in the Model agreement for software developers, the copyright remains with the zzp’er, whilst the Model agreement for ICT professionals allows for a choice between a transfer or a licence.

Advice: Use the amended (model) agreement

The conclusion is therefore that clients must pay close attention when using the model agreements provided by the Tax Authorities. The advice to clients wishing to secure intellectual property rights for themselves is to amend the provisions relating to the intellectual property in accordance with their wishes, in consultation with the contractor if required. This advice applies not apply only for new instructions but also to current projects in which zzp’ers are involved.

The Tax Authorities offer clients the explicit opportunity, instead of the model agreement, to submit their own or amended (model) agreement for approval. Clients who want all IP-rights transferred to them, would be wise to use this option.

The lawyers of the IE-IT department of Dirkzwager are happy to assist clients and contractors – for a fixed price – to make the necessary amendments to the (model) agreement to this end.

By Joost Becker