Inapplicability of “customary wage” scheme due to scope of duties
The “customary wage” scheme applies to any employee who is the holder of a substantial interest in the company that employs him or her involving a minimum applying to the wage level, as follows:
- 75 percent of the wage earned in the more or most comparable employment or, if higher,
- the top wage earned by the private limited-liability company’s other employees or, if higher,
- 46,000 euros.
The “customary wage” scheme does not apply where the duties performed on behalf of the company are limited in scope and the corresponding wage would not amount to more than 5,000 euros p.a.
The Tax and Customs Administration imposed an income tax assessment in the amount of 15,000 euros on the director-cum-controlling shareholder of a private limited-liability company, to which the recipient promptly objected. His failure to file a tax return had resulted in the burden of proof being reversed as well as elevated, with the District Court pointing out that no corroborating evidence was required where it concerned facts having been challenged without (adequate) substantiation. The Court found that the company director had met the elevated burden of proof with which he had been charged: such scant duties as he had performed for the company had been sufficiently limited in scope to ensure that the corresponding wage would not have exceeded the 5,000 euro mark. It was in actual fact the director’s father, who himself had the status of independently authorised director of the company, with whom the day-to-day management of the business rested. The director-cum-controlling shareholder himself was still in college and had been abroad as part of his studies. The company operated several properties whose lessees corresponded direct with the staff of the director-cum-controlling shareholder’s father’s real estate corporation. The file contained nothing tangible to suggest that the director-cum-controlling shareholder had performed any duties other than a handful of administrative formalities. The District Court reduced the income tax assessment to nil.
Dutch version: Gebruikelijkloonregeling niet van toepassing door omvang werkzaamheden