News › Weekly Alert Article
The Recent Impact of Dutch Crisis Levy
Crisis levy in Dutch Spring Agreement
The so-called 'Spring Agreement' comprises supplemental reforms and increases in the tax and premium burden including, among other things, increased wage costs. One of the measures impacting employers relates to the 'crisis levy'. This levy must be declared and paid at the time of filing the March 2013 wage tax deduction return. Whether or not the employee is still in employment at that time, is irrelevant. The tax rate is 16% and is levied in addition to the usual wage taxes. The levy is calculated on the wages to the extent that these exceeded EUR150,000 in 2012.
Ruling Court of Appeal Arnhem 12 February 2013
A recently published judgment rendered by the Arnhem Court of Appeal states why imposition of the crisis levy with retroactive effect up to 1 January 2012 is not permissible. In this matter, the Inspector wished to impose a tax assessment on a severance payment. The payment related, inter alia, to a period in which the levy on severance payments had not yet become effective and the taxpayer was not familiar with the proposed levy. The taxpayer's appeal to European case law regarding the protection of Human Rights was upheld by the Arnhem Court of Appeal. The Court found that the levy on the severance payment could not be anticipated by the taxpayer and therefore the Tax Authorities had no valid reason to levy tax with retroactive effect.
Lodging objection against the 16% crisis levy expedient
As employers usually pay out bonuses to high-performing employees in the spring, lodging an objection in which the position is adopted that the crisis levy is not due on bonuses that were paid out before the Spring Agreement was published, will probably be successful. The Tax Authorities could, after all, be acting contrary to a ban on the retroactive levying of tax on the bonuses.
Discover more: Dutch crisis tax on remunerations > EUR 150.000