The Ministry of Social Affairs and Employment has confirmed that the UWV Employee Insurance Agency will follow the ruling by the Council of State that Japanese citizens no longer require a work permit. This has far-reaching consequences for the immigration position of the Japanese in the Netherlands. The Immigration and Naturalisation Service (“IND”) will, however, adhere to the requirement that a residence permit must be applied for in the case of a stay of longer than ninety days.
In 2012, the Inspectorate SZW of the Ministry of Social Affairs and Employment (“Labor Inspectorate”) imposed heavy penalties on the Japanese cultural center Shofukan in Rotterdam. During the renovation of the traditional Japanese teahouse Senshin-an, three Japanese carpenters were employed to perform certain traditional carpentry work. The Labor Inspectorate ruled that a work permit was required for this and subsequently imposed high penalties.
In its defense, the cultural center referred to the Japanese Trade Treaty from 1913, which includes a most-favored nation clause. What this means is that if the Netherlands concludes a treaty with another nation that contains more favorable provisions, these provisions will also apply to Japanese nationals. The Netherlands has such a treaty with Switzerland: the Netherlands Switzerland Treaty of Friendship, Commerce and Establishment of 1878. It follows from this that Japanese citizens, with regard to their rights to work, stay and even live in the Netherlands, must be treated equally to Swiss citizens. Because the Swiss have been practically free to work and live in the Netherlands since 1878 as long as they do not claim social security benefits, the Japanese now also have such rights of freedom of residence and establishment.
After the district court in The Hague upheld the appeal in March 2014, the Council of State decided on December 24, 2014 that the penalty had indeed been wrongly imposed and that it should be cancelled.
Ruling by the Council of State and its consequences
A direct consequence of the ruling was that penalties could no longer be imposed on employers who employed Japanese citizens without a work permit. However, the departments involved still had to determine how this ruling would be implemented in legislation and regulations and the advice was therefore to continue to apply for residence and work permits until further notice.
However, the Ministry of Social Affairs and Employment recently published a letter confirming that the UWV Employee Insurance Agency will follow the judgment of the Council of State and that, effective immediately, Japanese citizens therefore no longer require a work permit. This still needs to be included in the Regulations implementing the Foreign Nationals Employment Act and applies to all forms of employment covered by the Foreign Nationals Employment Act.
The IND, however, is adhering to the requirement that a residence permit must be applied for in the case of a stay of longer than ninety days. The permit contains an entry stating that there are no work restrictions. It cannot be ruled out that the residence procedure will be further simplified in the future.
The IND has also determined that the fee for the residence permit remains unchanged at EUR 870 for a first application. It is expected that the amount of the fee will be questioned and that the IND will at some point be forced to reduce it to the amount that applies to EU applications, currently EUR 53.
Employers of Japanese citizens who still have a valid work permit do not need to take any action. Japanese citizens who are in possession of a residence permit with work restrictions may apply to the IND for an amendment to their residence permit. The IND can then issue a new residence permit on which it is stated that the holder has free access to the labor market and that no work permit is required.
If you would like more information on this topic, please contact your own Meijburg tax advisor or Heleen Snieders.