Application of “working hours” criterion
An entrepreneur in the Netherlands will be entitled to self-employed person’s tax relief on condition that he or she should devote at least 1,225 hours per calendar year to his or her business (the “working hours” criterion). If the entrepreneur in question also holds down a job with an (external) employer, he or she will additionally be required to devote in excess of half his or her total working hours to his or her own business (the “in the main” criterion).
A Supreme Court ruling from 2003 having confirmed that time spent travelling in aid of one’s business operations should be taken into consideration when calculating whether the “working hours” criterion was being met, the Hague Court of Appeal directed that the same should apply to employees where it concerned the time spent commuting in connection with their job. The inclusion of travel time in the calculation of numbers of hours worked by a particular entrepreneur in his employer’s service unfortunately caused him to fail the “in the main” criterion and forfeit his self-employed persons’ tax relief. The District Court at an earlier juncture had ruled that the travel time was to be left out of consideration as the employer did not recognise it as hours worked and was not compensating its employee for the latter’s travel time. According to the Hague Court of Appeal, the qualification (or not) of travel time as “hours worked” and/or the payment (or not) of compensation for time spent travelling lacked relevance where it concerned the assignment of the relevant amount of time to the employee’s job.