Double tax relief also applies in case of leave period in first three months | Deloitte

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Double tax relief also applies in case of leave period in first three months

An employee worked in Angola for well over a year but took quite some leave in the first three months. According to the Supreme Court he still worked in Angola for three consecutive months and was entitled to double tax relief.

7 March 2018

No treaty

A Dutch resident captain sailed the international waters of Angola and Congo. The Netherlands has not entered into a double tax treaty with these countries. Whether the captain was entitled to double tax relief should therefore be judged according to national legislation. This legislation contains the fiction stipulating that someone who has worked in a country with which the Netherlands does not have a treaty for at least three successive months, is considered to be subject to taxation in that country. As a result, the Netherlands grants double tax relief.

Double tax relief not in order

The captain’s secondment started in mid-November 2012 and in any case lasted until December 2013. He worked 34 days and took 50 days of leave in the first three months of his secondment. Referring to legislative history, the Arnhem-Leeuwarden Court of Appeal ruled that the captain did not work in Angola for three consecutive months because the leave days were not proportionate to the working days. Hence, double tax relief is not in order.

Still entitled to double tax relief

According to the Supreme Court, though, regular interruptions of work, such as leave days, can be factored in when determining whether someone has worked for three consecutive months. The full secondment period is important in this respect and not, as the Court of Appeal stated, only the first three months. This means the interested party is still entitled to double tax relief.


Source: Supreme Court 23 February 2018, no. 17/02487, ECLI:NL:HR:2018:254

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