According to the court of North Holland a Ukrainian refugee who travelled to the Netherlands in March 2022 is eligible for the 30% ruling. The employee fled Ukraine with his family, after which they were granted temporary residence in the Netherlands. In Ukraine, they kept their home, bank accounts and a TV subscription, i.a. The employee worked on a ship under the Liberian flag until August. In September 2022, he signed an employment contract with the employer where he started working in October 2022.
The Dutch tax authorities value the reason for an employee to stay in the Netherlands. Specifically for Ukrainian refugees, the position is taken that they are in principle not considered as incoming employees. And that would also mean that there is no possibility of obtaining the 30% ruling.
The reason for excluding the group of Ukrainian refugees is that they did not come to the Netherlands in the context of the employment relationship. Although this also applies to other groups, this technical position is specifically taken for Ukrainian refugees. Based on established case law, the question whether an employee has been recruited from abroad is whether the employer entered into an employment contract with the employee at the time when the employee was resident outside the Netherlands and was not working in the Netherlands – other than in situations such as training or internship. Since the Dutch tax authorities made their position known, there have been doubts about its validity. Fortunately, the court ruling is the start of further development of this discussion.
The court rules that, since the introduction of the concept of extraterritorial costs (ET costs), the motive for the move to the Netherlands is not of decisive importance for the application of the 30% scheme. An incoming employee is an employee who (i) is recruited from another country by a withholding agent or (ii) is sent to a withholding agent. Motive plays no role in either category, and it is always the case that private reasons also play a role, according to the court.
The court rejects an appeal by the Dutch tax authorities to a ruling in which private reasons were decisive for the Supreme Court to consider the 30% scheme inapplicable. That ruling concerned an employee whose (work) situation did not actually change and who moved to the Netherlands purely for private reasons. The court does not find those circumstances comparable to the case at hand and, more importantly, that ruling did not involve recruitment from abroad (1st category) but a posting (sending to) (2nd category).
The court is also of the opinion that the employee did not yet live in the Netherlands at the time the employment contract was concluded (which may be earlier than the moment the employment contract was actually signed). In this respect, the court considers the ongoing connection with Ukraine to be important, the fact that the employee worked on a ship and occasionally went ashore and had no prospect of a long-term right of residence. This means that the employee could be considered an employee recruited from another country.
We expect more rulings in the (near) future that will provide further clarity on this special group of employees. We keep you posted on further developments.
