25-years term of the discount scheme of the 30% ruling doesn’t lead to prohibited discrimination

Source: Conclusion Advocate General, Supreme Court 29 September 2015

X has the Dutch nationality and has lived in the Netherlands during the first 26 years of his life (1966-1992). After that he was living in the United Kingdom (1992-1995) and the United States (1995-June 2012). From February to August 2012 X was working for a group of companies based in Norway, while he was formally employed by a British-based subsidiary of this group. In this period X spent his working days alternately in England and Norway. In July 2012, X was appointed as a Director of a newly established (Dutch) holding of the group. Because of this appointment he moved (back) to the Netherlands with his family in June 2012.

The tax inspector rejected the application of the 30% ruling on the basis of the discount scheme of article 10ef of the Implementation Decree Wage Tax 1965. Based on this discount scheme someone who was already employed or staying in the Netherlands for a certain period, gets a reduction on the maximum term of the 30% ruling upon return to and employment in Netherlands for the duration of this earlier period, in so far as this period didn’t end more than 25 years prior to the new employment in the Netherlands. In the current case this would mean that the maximum term of the 30% ruling of 8 years (since 2019 the maximum term is 5 years) would be reduced with the period of earlier stay in the Netherlands of 26 years (since he came back to the Netherlands within 25 years after he left the Netherlands in 1992) thus leaving no remaining term of the 30% ruling.

The discount scheme therefore makes a distinction between persons that may or may not have already resided in the Netherlands prior to their stay abroad.

This procedure handles about the compatibility of the 25-year term of the discount scheme of article 10ef Implementation Decree Wage Tax 1965 with the prohibited discrimination in different treaties. Court North Holland ruled that the rejection of the application of the 30% ruling due to the use of discount scheme is no prohibited discrimination, or is justified by objective reasons.

X has filed a jump appeal with the Supreme Court (skipping Higher Court) but according to Advocate General Niessen the appeal is unfounded. According to the Advocate General there is no prohibited difference in treatment under Community law and neither there is inconsistency with the discrimination prohibits of article 14 of the ECHR and article 26 ICCPR.

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