Court decision on sector classification for consultancy services

What was the case about?

In this case, the Dutch Tax Authorities argued that the consultants worked under the supervision and direction of the client. According to the inspector the company should be classified under sector 52 (temporary employment agencies). The Court disagreed.

Detailed analysis showed that less than 15% of the wage base was linked to activities that could possibly fall under the client’s supervision and direction. This meant the requirements for sector 52 classification were not met.

Based on the facts and circumstances, the Court ruled that the consultants did not work under the supervision and direction of the client. The fact that the company invoiced by the hour, that consultants worked regularly at client sites and that frequent meetings took place did not change this conclusion.

The inspector did not sufficiently demonstrate that there was a case of making labour available within the meaning of sector 52.

Sector classification: why does it matter?

Employers are automatically assigned to a sector for employee insurance premiums based on their actual activities. When the nature of the activities changes, the sector classification may also change. The employer is obliged to report such changes.

If the Tax Authorities find during an audit that the classification is incorrect, they can impose additional premiums for up to five years. Note that any premiums paid in excess due to an incorrect classification cannot be reclaimed. It is therefore essential to review sector classification regularly.

Wtta

With the upcoming introduction of the Provision of Personnel Accreditation Act (in Dutch: Wet toelating terbeschikkingstelling van arbeidskrachten, Wtta) on 1 January 2027, sector classification is expected to become a more frequent topic of discussion — especially for companies that deploy employees externally.

Where assessments were not always very strict in the past, Wtta reviews may reveal that labour deployment is taking place. This can lead to (partial) classification in sector 52 and possibly even additional tax assessments.

A change in sector classification can also indirectly affect:

• participation in a branch-related pension fund
• compliance with a collective labour agreement (CAO)

Although these matters are formally assessed separately, they are often connected. It is therefore advisable to review these aspects when the sector classification changes.

What does this mean for your organisation?

This ruling shows that the line between consultancy and temporary employment can be thin in practice.

Therefore, it is advisable to:

• check regularly whether your current sector classification is still correct
• assess whether the classification aligns with your actual business activities
• start preparing for the introduction of the Wtta now