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Wages from current or previous employment?

A recent lawsuit handled by the Court of Arnhem-Leeuwarden revolved around the income tax return of an ex-employee, who had applied a tax credit to (severance) pay he had received. The Dutch Tax and Customs Administration had subsequently made a correction to the respective tax return, invalidating the applied tax credit. The employee tried to convince the judge that the pay he had received was to be regarded as wages from his current employment, meaning the tax credit could be applied. However, he did not succeed.


When the employee received the respective pay, he was on sick leave at home but cooperating with reintegration activities. The employee had concluded that the payment constituted wages from his current employment, given that at the time he was still employed by the organization. However, the judge did not consider the fact that their was still an employment relationship between employee and employer a convincing argument. The judge did not see any connection between the pay received and work done in the context of employment. This was further confirmed by the fact that the employer had specified the payment as ‘severance pay’ on the employee’s pay slip. In other words, the pay received was made in regards to a dismissal and thus legally constituted wages from previous employment, not current employment. This meant the tax credit could not be applied.

Court of Arnhem-Leeuwarden, July 20, 2021; ECLI (abridged): 6903

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