Court: the 30% ruling can not be continued if the period between end of employment and new employment contract is more than three months
Zeeland-West Brabant District Court 01-02-2023, ECLI:NL:RBZWB:2023:784
An employee came to the Netherlands to work for a Dutch company on January 1, 2019. The tax authorities issued a grant for application of the 30% ruling for the maximum 5 years. The period of the grant is from January 1, 2019 to December 31, 2023. Employee received salary from the Dutch company until May 31, 2019. After that date, he went on unpaid leave and continued to live in the Netherlands. As of December 1, 2020, he found a new employer. He requested the tax authorities to continue the 30% ruling. This request was rejected because the period between the two employments was too long. At issue is whether the request was rightly rejected.
The court ruled that one of the conditions of the 30% ruling is that there must be no more than three months between the end of employment with the old employer and the conclusion of the employment contract with the new employer. Subsequently, the court ruled that this condition was not met in this case. The employment with the old employer ended on May 31, 2019. The fact that he did remain in unpaid employment does not matter. What matters, according to the court, is the end of the employment and not the end of the employment contract.
Employee then argued that if he had returned to his country of origin at the end of the employment and then returned to live in the Netherlands for his new employer, he would have been eligible for the 30% ruling. The court interprets this statement to mean that he believes he can be granted a new 30% ruling. However, the court rules that the issue is whether the decision already granted can be extended and not the assessment of a new application. In addition, he did not make it plausible that he would then be entitled to the 30% ruling. After all, he actually continued to live in the Netherlands, even though his residence permit had been temporarily revoked.
The appeal was declared unfounded.
This court case makes it clear once again that the 30% ruling applies as long as work is actually being performed. If the employee is exempted from work or goes on unpaid leave within sight of the end of the employment, the 3-month period starts immediately. This should therefore be taken into account and it is advisable for the employee to look for a new job immediately. If a new employment is concluded within 3 months, the 30% ruling can be applied for the employment with the new employer. This employment does not have to start within 3 months. The employee can still take longer leave if this has been discussed with the new employer. Proper planning is very important.
Expatax can help and advise you on the application of the 30% ruling. We help both employers and employees.