Technical explanation of art. 9a to 9h of the 30% text up to 2011

Article 9a prescribes the factors that should at least be taken into account when evaluating the question of whether an entered employee has specific expertise that is scarce or absent on the job market in the Netherlands. This provision is based on the old 35 percent scheme.

Article 9b, section one, sets the terms of the proof scheme for entered employees in accordance with the old 35 percent scheme at a maximum of ten years. For longer periods of employment the main scheme of Article 15a, part k of the Act applies. According to section two, the term of the proof scheme for transferred employees is equal to the duration of the transfer period. A maximum of ten years does therefore not apply, which was not the case for the old Nedeco scheme either.

Article 9c, section one, provides that if the entered employee changes employer within ten years after his first period of employment, he can submit, together with his new employer for the remaining term of employment, a new request for application of the proof scheme. If the application is accepted, the employee will be able to take advantage of the scheme for a maximum of ten years. Under section two, this is possible only if the employee still possesses scarce, specific expertise. This means an extra check to confirm the scarce, specific expertise of the employee. Obviously, the employee can still be considered to have been recruited in, or sent from another country. The last sentence of section one provides that a request to continue the proof scheme cannot be complied with if the employee has taken over three months to find other employment. The reason for this is that the expertise of the entered employee would then be manifestly less scarce, so that he would no longer qualify for application of the scheme, while in that case the employee could not be considered as entered with respect to the new employer.

Pursuant to Article 9d the term of the proof scheme is reduced if the entered employee can no longer be considered as such because his expertise is no longer scarce. This may be the result, for example, of developments on the job market. The proof scheme no longer applies from the time it emerges that the entered employee is no longer scarce. The minimum term, however, is always five years, unless it is shorter than five years owing to another discount scheme. The maximum reduction of the term is therefore five years. The reason for this is that for practical considerations, the scarcity can be considered to exist for the first five years of the term. Section two provides that the tax inspector can request the employer to demonstrate from the sixth year of the term that the employee is still scarce. The burden of proof therefore lies with the employer.
According to section three, as from the sixth year of the term an employer can also demonstrate at his own initiative that the employee should still be considered an entered employee. If the employer succeeds in this effort, the tax inspector cannot apply section two. In this way the employer and the entered employee are assured of the application of the decree to the remainder of the term. As under the old scheme, I have no objection to this check being used marginally in both cases.

Article 9e provides that the term is reduced for entered employees if the employee had already stayed or worked in this country at a time that did not immediately precede employment with the employer. In this way the situation is reached in which the scheme is not applicable, or that the term is shortened for employees who stayed or worked in the Netherlands in the past. This article was derived from the discount scheme used in the old 35 percent scheme. Section one provides that the term is reduced by the periods of previous residence or employment.
Section two provides that periods of previous residence or employment that preceded present employment longer than fifteen years are not eligible. This mitigation of the effects of section one is included to facilitate implementation of the discount scheme.
Section three provides that periods of previous residence or employment that are shorter than fifteen years but longer than ten years that preceded present employment by the employer, are not taken into account if the employee did not stay or work in the Netherlands in that period of ten years. This provision as well mitigates the effect of section one. Section three means that in the event an employee stayed or was employed in the Netherlands during this period of ten years prior to employment by the employer, in addition to this period, periods or a stay of employment prior to the ten year period will be subtracted from the term.
Section four provides that certain short periods of previous employment in the Netherlands do not negate mitigation of section three. Section four is thus another mitigation of section three. An employee can work a maximum of twenty days in the Netherlands without being subject to a discount; this relaxation has proven necessary in practice with respect to the maximum of five days that applied previously. It should be pointed out that these periods of employment must be subtracted from the term, pursuant to section one.
Section five provides that certain periods of previous stays in the Netherlands for holiday or the like, do not cancel relaxation of section three. Section five, like section four, is thus a mitigation of the effect of section three. It should be pointed out that these periods of employment must be subtracted from the term, pursuant to section one.

Article 9f provides that for entered employees the term is reduced if the request to apply the proof scheme is not submitted within four months after the employer first employs the extraterritorial employee.

Article 9g provides that all reductions of the term are rounded up to full calendar months. The reason for this is that Section 3, as in the case of the old 35 percent scheme, fits a monthly framework for practical considerations. The result of this is that if the term must be shortened by a few days pursuant to one of the aforementioned articles, the term is shortened under Article 9g by a month. If the term is to be shortened by another period, this period would likewise have to be rounded upward to a whole calendar month, etc. This approach prevents uncertainty on the application of the discount in the event an employee was employed in the Netherlands from abroad in the past for one day per week for a year. In that case 52 weeks (and hence twelve months) would be deducted and not 52 days. What is concerned here is continuation of the existing arrangement.

Article 9h provides rules for the request for application or continued application of the proof scheme. Such a request must under section one be submitted to the competent tax inspector. For transferred employees, this is the inspector 'of' the employer; for entered employees, as is now the case, the BPO inspector abroad would be designated for this purpose. The inspector decides on the request by a decision that is eligible for objection.
According to section two, the decision issued by the inspector would have retroactive effect to the start of employment as extraterritorial employee by the employer, providing the request is made within four months after the start of this employment. If the request is made later, the decision would apply starting the first day of the month following the month in which the request is made.