Dutch court case, Zeeland-West-Brabant District Court

26th of June 2019 | Door:  Barry Scheer

Application of the 30% ruling for incoming (foreign) employees requires that the employee doesn’t have a place of resident in the Netherlands when the employment contract is concluded. If he/she has a place of residence in the Netherlands, he/she is not ‘recruited from another country’.

Source: Taxence, 20 March 2019

In 2010, a foreign student came to the Netherlands for study purposes and in December 2012 he succeeded the Master of Science Automotive Technology at a Dutch educational institution. The foreign student had signed an employment contract and had been employed by a Dutch employer since 2013. On 5 December 2014, the foreign employee and his employer submitted a request for application of the 30% ruling.

In a dispute with the Zeeland-West-Brabant District Court, the question was whether the foreign employee had been recruited from another country, as a result the 30% ruling could apply. In this case, it is relevant whether the foreign employee had a place of residence in the Netherlands.

To determine the employee’s place of residence in the Netherlands, all relevant facts and circumstances are decisive. The tax inspector argues that the foreign employee has been living in the Netherlands since 2010, at least at the time of entering into the employment contract. The following facts and circumstances were mentioned by the tax inspector:

• the student room where the employee was staying during his studies up to a few months after entering the employment contract;
• the Dutch bank account;
• the obligation to have a Dutch health insurance;
• the scholarship and internship allowances that he received from the Netherlands and were paid to his Dutch bank account;
• the fact that the employee had a Dutch correspondence address; and
• the obligation to find a Dutch employment contract for a minimum of three years on the basis of the "Scholarship Agreement" with the Dutch school.

The court concluded that the employee, who had the burden of proof, didn’t provide the necessary evidence that he was recruited from abroad and to that effect the court decided that the tax inspector had the right to refuse the application of the 30% ruling.