Football players are sometimes entitled to a share of the transfer fee paid for them and this compensation can legally be considered as severance compensation. A special employers tax on excessive severance compensation was introduced in the Netherlands in 2009. Since then, a tax of 30% of the excessive part of the severance compensation was levied on the employer. However, in the context of so-called crisis measures, the special employers tax increased to 75% in 2013. Two procedures have been settled at first instance in the past months concerning this special employers tax on excessive severance compensation in relation to the transfer of football players from Dutch clubs to foreign clubs.
The Hague District Court, 30 March 2017, ECLI:NL:RBDHA:2017:3429
North Holland District Court, 24 April 2017, ECLI:NL:RBNHO:2017:3212
On 30 March 2017, the The Hague District Court decided on a tax related matter concerning the transfer of a football player.[1] After Player A had been transferred from Club B to Club C in July 2014, a special employers tax for an excessive severance compensation was levied on Club B.
In addition, on 24 April 2017, the North Holland District Court ruled on a similar matter.[2] Player X transferred from Club Y to Club Z in July 2012. Also in this case, the player had negotiated a percentage of the transfer fee, for which a special employers tax for an excessive severance compensation was levied on Club Y.
The District Courts clarified whether in these cases the special employers tax must be applied to the player’s right to a percentage of the transfer fee.
Legal Framework and Background
The Dutch Wage Tax Act...
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