The Resource X v State Secretary for Finance (Fictitious Wage 3) : No 15/04977

X v State Secretary for Finance (Fictitious Wage 3) : No 15/04977

Label
X v State Secretary for Finance (Fictitious Wage 3) : No 15/04977
Title
X v State Secretary for Finance (Fictitious Wage 3) : No 15/04977
Creator
Contributor
Subject
Language
eng
Summary
Judgment by Dutch Supreme Court (Hoge Raad), judgment date 18 November 2016. The taxpayer was a Dutch national resident in Portugal. He held a substantial interest in and was a director of a Dutch company. The taxpayer worked from the company's place of business. The Dutch revenue authorities applied art 12a of the Dutch Wage Withholding Tax Act to render the taxpayer liable for fictitious or imputed wages. In 2001, the Netherlands-Portugal double taxation agreement came into force. Continued application of art 12a meant that income which would have been taxable in Portugal under the treaty was reclassified as income taxable in the Netherlands. The issue was whether the application of such a domestic fiction was prohibited because it resulted in a potential shift in the allocation of taxation rights. The Dutch Supreme Court approached this issue in a broad manner, asking whether it is in keeping with the principle of good faith to allow the Netherlands to create under its domestic law a category of deemed income where no such category exists under Portuguese law. That issue, in turn, is linked to the question whether there was evidence that Portugal knew and acceded to the creation of a category of deemed income under Dutch domestic law, which might be taxable in the Netherlands. The Supreme Court ultimately concludes that the Treaty should not be interpreted to allow the Netherlands to tax this category of deemed income. The Supreme Court does not expressly make reference to the "other income" Article. Nevertheless, the Supreme Court concludes that the Netherlands has no right to tax a fictitious wage which is deemed to arise under Dutch law
Citation source
In: International tax law reports. - London. - Vol. 20 (2017), part 2 ; p. 125-159
http://library.link/vocab/creatorName
  • Pötgens, F.P.G
  • Avery Jones, J.F
Geographic coverage
European Union
Language note
  • English
  • Dutch
http://library.link/vocab/relatedWorkOrContributorName
Baker, P
http://library.link/vocab/subjectName
  • case law
  • treaty interpretation
  • good faith
  • wage tax
  • reciprocity principle
  • domestic tax law
  • allocation of taxing rights
Label
X v State Secretary for Finance (Fictitious Wage 3) : No 15/04977
Instantiates
Publication
Label
X v State Secretary for Finance (Fictitious Wage 3) : No 15/04977
Publication

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