In our April 2013 Newsletter we reported on the Court of Appeal ruling that a Belgian national who had previously been in full time employment but was now a member of a company’s Supervisory Board (non-executive Director), could qualify also for a tax benefit (the 30% ruling) in relation to income from an additional Supervisory Board membership that he held simultaneously. Membership of a Supervisory Board is treated as an employment for Dutch tax purposes.
Subject to certain conditions an employer can grant a tax free allowance equivalent to 30% of the gross salary to highly skilled foreign nationals coming to the Netherlands for a specific employment role. Where an individual changes employment, the 30% ruling can still apply in respect of the new employment as long as that new employment commences within three months of the termination date of the first employment.
The Dutch Supreme Court has now ruled that the three-months condition must also be met in this particular case. Because the first Board membership had not been terminated, the time between the commencement of the second Board membership and the end of the original full time employment is the time that must be tested to determine if the three-months condition is met. Because it did not commence within three months of the termination of the original employment the 30%-ruling was not available in respect of the second Board membership.
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