30%-ruling for stock options

30%-ruling also applies to income from stock options received after departure from the Netherlands

Hoge Raad, 05-12-2011, CPG 11/01873, BU8932 Uitvoeringsbesluit loonbelasting 1965 artikel 9, Uitvoeringsbesluit loonbelasting 1965 artikel 9B 30%-regeling

Attorney General Van Ballegooien agrees with the court that the income from stock options received by X after leaving the Netherlands falls under the 30%-ruling.

X, an American, has worked for Company A in the Netherlands and was eligible for the 30%-ruling. During his employment his employer granted him conditional stock options, which immediately became unconditional after his departure from the Netherlands. In 2006 X received income from the stock options after leaving the Netherlands. In dispute was whether the 30%-rule applies to the share income.

Attorney General Van Ballegooien agrees with the court that the income from stock options received by X after leaving the Netherlands falls under the 30%-ruling. The AG concluded that the duration of the 30% rule does not end with departure from the Netherlands in view of the closed system of the Implementation Decree for Salary Tax 1965 and the case history of the 35%- and 30%-rulings. On the grounds of the 30%-ruling the Attorney General concluded that the conditional options also fall within these grounds as this is in agreement with the intentions of the employer. The reasoning of the court that the income from options must be attributed to the the period that X was employed in the Netherlands was not preferable according to the Attorney General, because attributing to the period in which the employee worked in the Netherlands could lead to other income received outside the period also being brought under the 30%-ruling.

An ending to the application of the 30%-ruling comes once and the period of eligibility is a condition for bringing an income received under the 30%-ruling, according to the Attorney General. After the period expires the incoming employee can receive reimbursement of any extraterritorial costs incurred according to the Salary Tax Law 1964 (old). Furthermore, the Attorney General considered the incurring extraterritorial costs not as a prerequisite for eligibility for the 30%-ruling, because it has a fixed character. Moreover, the question is whether the incoming employee makes any more extraterritorial costs after leaving the Netherlands. Finally, the Attorney General explained the calculation method of the 30%-ruling.

The Attorney General advised the Supreme Court to declare the appeal of the State Secretary as unfounded.