On January 29, 2016, the Supreme Court rendered judgment on the crisis levy in 2013 and 2014. This judgment is the outcome of proceedings concerning the crisis levy for 2013 and the test case proceedings conducted by Meijburg & Co with regard to 2014. The Supreme Court ruled that retroactive effect is justified. According to the Supreme Court, the crisis levy does not violate the right to property that is protected under Article 1 of Protocol No. 1 to the European Convention of Human Rights and Fundamental Freedoms (ECHR).

Crisis levy

In both 2013 and 2014 a one-off employer’s levy of 16% was levied on salaries that in preceding years, i.e. 2012 and 2013, exceeded EUR 150,000. Many employers filed objections against the crisis levy, a number of which are being litigated as test cases, although individual cases are also pending.

Proceedings concerning 2013 and 2014

A number of arguments were put forward in these proceedings. In particular it was argued that the crisis levy is contrary to the fundamental right to the peaceful enjoyment of property of Article 1 of Protocol No. 1 to the ECHR, because it has an unacceptable retroactive effect.

During the preliminary stages, the District Court and the Court of Appeals in The Hague and the Court of Appeals in Amsterdam rejected all the arguments in the various proceedings. The Noord-Holland District Court ruled otherwise. This Court considered that the crisis levy in 2013 and 2014, as a whole, was not in conflict with provisions of the Payroll Tax Act 1964 or Article 1 of Protocol No. 1 to the ECHR. What, however, was in conflict with these rules, according to the District Court, was the crisis levy on incidental payments that exceeded EUR 150,000 and which were made before April 26, 2012 (crisis levy 2013) or before March 1, 2013 (crisis levy 2014).

In his opinion to the Supreme Court, Advocate General Wattel concluded that retroactive effect is present and that this cannot be justified for a number of reasons. According to the Advocate General, the crisis levy is thus in violation of Article 1 of Protocol 1 to the ECHR. He believes that the scope of the crisis levy for 2013 therefore should not go further back than May 25, 2012, and no further back than September 17, 2013 for the crisis levy for 2014, as it was only on these dates that the crisis levy was adequately announced.

The Supreme Court judgment

Unfortunately, the Supreme Court has rejected the arguments and ruled that the retroactive effect is justified. This means that the proceedings have, in principle, come to an end. As one of the arguments related to the violation of the fundamental right to the peaceful enjoyment of property, a next step could be a complaint to the European Court of Human Rights (EHRM). It is not yet known whether this step will indeed be taken.

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