Source: Supreme Court 19 June 2015
For workers from abroad with specific expertise there is a special benefit: the 30% ruling. Sometimes the application is only filed if the employee is employed for some time, while the regulation has been adjusted since 1 January 2012. What regulations should apply in order to assess whether the employee meets the conditions?
In 2011 Mr. P. concludes a contract of employment with an employer established in the Netherlands. P, born in 1984, has the Portuguese nationality and has a university master's degree obtained in Portugal. The gross annual salary of P amounts to € 34,993. In 2013, P files the application of the 30% ruling. The tax inspector rejects the application.
In appeal Court Zealand-West-Brabant must assess whether P meets the specific expertise requirement (article 10eb Implementation Decree Wage Tax Law), in other words: if he has the required specific skills and experience. The question is whether this should be judged against the criteria in force in the year in which the employment contract is concluded (2011), or on the basis of the modified criteria, which apply in the year in which the application for the 30% ruling was filed (2013). That P does not meet the conditions according to the criteria of 2011, is not in dispute.
According to the Court the review should, on the basis of case-law of the Supreme Court (HR 28 April 2006) take place according to the regulations in force in the year of entry. In the case of P that is 2011. And because P does not have the required skills and experience according to the regulations in 2011, the application for the 30% ruling is rightly rejected, according to the Court.
In cassation P argues that article 10eb Implementation Decree Wage Tax Law has been changed per 1 January 2012. These changes have direct effect and the Court has disregarded this, according to P. Since 1 January 2012 an exemption is possible with respect to the specific expertise requirement for employees with a university master’s degree who are younger than 30 years old and earn more than a certain salary (in 2013: € 27,190). P satisfies the conditions for application of this exemption.
The Supreme Court considers that the thought behind the 30% ruling is to enable businesses to attract employees with scarce expertise by providing a facility whereby the net disposable salary is increased. In line with this thought must be determined whether the employee possesses the required specific expertise on the basis of the facts at the time of conclusion of the employment contract. After all, at that moment the domestic employer must compete with foreign employers and benefit from the existence of the facility.
The time of conclusion of the employment contract is also decisive for the question of which regulation should be applied. The assessment of the expertise must take place on the basis of the current regulations at that moment, according to the Supreme Court. That is also the case if only at a later date the application for the 30% ruling was filed and the regulation has now been changed.
The time of conclusion of the employment contract is decisive. The particular nature of the scheme, an ongoing facility, leaves no room for monitoring based on afterwards modified regulations. The present situation is exactly described in the question and answer decree from the State Secretary of Finance of 23 August 2013.
In this case the changed regulation was the most important aspect of the discussion. But also if the first employment contract was concluded after 1 January 2012 and the application was rejected at the time because the salary was not high enough (since 1 January a certain salary is required to qualify for the 30% ruling), a later salary raise or change of employer whereby the new employer offers a higher salary, will not suddenly make the employee qualify for the 30% ruling. Only relevant is the situation on the date of conclusion of the employment contract. Later changes have no positive effect. The same if the employee was not an incoming employee at the time of migration to the Netherlands. If a job is found after arrival in the Netherlands the ruling won't apply.