On 18 March 2004 the Court of Appeal of Amsterdam decided that a central mid-field football player (referred to as a No. 10 player) was entitled to application of the socalled 30% tax regime. Under this regime, the taxpayer may receive a tax-free deemed ?reimbursement? of 30% of his gross taxable salary. Among the conditions for qualifying for the regime are that the employee is hired while being a non-resident, and that the employee has qualities which are scarcely available on the Netherlands labour market.
Regarding football players the relative income of the player is used by the tax authorities as an indication whether the qualities of the player is scarce. In a previous case (also reported in the NEWS section) the Court of Appeal of Leeuwarden had held that a left footed defence player did not qualify for the special regime on the basis of the argument that he earned (significantly) less than the average income.
In this particular case, the tax authorities again used the level of income as the decisive reason for not allowing the player to apply the 30% income tax regime. However, the Court of Appeal held that employee may also use other means to show that the employee has qualities which are scarce in the Netherlands. On the basis of newspaper articles on the talent and qualities of the pertinent football player and information on the number of games he had played for the National Team of his country of origin, the Court held that the employee was entitled to the application of the 30% income tax regime.
The decision could also be applicable to other foreign football players that are active in the Netherlands, who where not eligible to the application of the 30% tax regime on the basis of the income test. It is to be expected that the Netherlands tax authorities will go into appeal against this decision, and if so the Netherlands tax authorities will probably not already be prepared to make the 30% income tax regime applicable in similar situations.