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Written by:
Bas Hollenberg


Passage of time puts kybosh on 30% tax ruling for second part-time job

The Supreme Court not too long ago dismissed the application of the 30% tax ruling to a second part-time job where there had been a gap in excess of three months between the date of commencement of said part-time job and the date of termination of the original full-time position, and in doing so sided with the Advocate General whereas the Bois-le-Duc Court of Appeal had previously ruled against the Tax and Customs Administration for disallowing the application of the 30% tax scheme.

The 30% tax ruling is a flat-rate tax scheme for inbound expatriates by way of compensation for their additional expenditure when they are posted to the Netherlands for work. The essence of the scheme is that 30% of the aggregate gross remuneration qualifies as tax-exempt compensation for extraterritorial expenses. It is essential in order for the 30% tax ruling to apply that the worker In question should boast specific expertise which the Dutch labour market does not (sufficiently) cater for and that he or she should have been brought in from another country. The expat worker in question will be at liberty to change jobs without this causing the 30% tax regime to lapse on condition that the date of termination of the old job and the date of commencement of the new job should not be more than three months apart.

The Bois-le-Duc Court of Appeal had previously decided that it was permissible for the 30% tax regime to be applied to a supplementary job, in a case which revolved around an expat employee to whom the 30% tax scheme already applied when he quit his original job and within the requisite (three month) term joined a different company as a non-executive director. His new duties took up less than a full-time work week, which prompted him in due course to take up the offer of a second non-executive directorship. The Tax and Customs Administration denied his request for extension of the 30% tax regime to include the second non-executive directorship, arguing that the employee’s work had already been based in the Netherlands at the time he concluded the second contract while the date of termination of his original employment contract had been considerably earlier than three months ahead of his taking up his duties under the second non-executive directorship.

The Supreme Court established that the first non-executive directorship had only partially replaced the original service contract while it had taken the employee more than three months to find a replacement for the remainder of his work week, thus failing to satisfy the condition imposed on the continuation of the 30% ruling, in accordance – as the Supreme Court wrapped up – with the rationale of the regime in question.

Read our previous article Procedures 30%-rule  and about our service in the 30% rule

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