The 30% ruling is a form of tax relief available to qualifying foreign employees. The ruling allows foreign employees to receive 30% of their salary as an untaxed allowance. The Court of Appeals Den Bosch has recently ruled that the 30% ruling is also applicable to supplementary payments received by the employee after leaving the Netherlands, or after the termination of the employment in the Netherlands.
The case in question concerned an American employee who had worked in the Netherlands, but had returned to the US. His Dutch employer had granted stock options subject to conditions, which had not yet been fulfilled at the time the employee left the Netherlands and had returned to the US. After leaving the Netherlands, the stock options became unconditional and were exercised by the employee, as a result of which the employee realized a profit. The Dutch Revenue took the position that the profit was taxable in the Netherlands and that the 30% ruling could not be applied, because the employee did not have an unconditional right to the options at the time he left the Netherlands.
However, the Court of Appeals has ruled that the 30% ruling can be applied to all supplementary payments. Decisive is whether this involves the payment of salary allocable to the period in which the employee made use of the 30% ruling. According to the Court of Appeals, whether the employee, upon receipt of the supplementary payment, is still living or working in the Netherlands is irrelevant. Also irrelevant is whether the stock option right was unconditional at the time the employee left the Netherlands.
The Deputy Minister of Finance has appealed this decision to the Supreme Court. We will have to wait and see how the Supreme Court rules in this matter.