Reality takes precedence over what is put on paper. This is once again evident in a case in which the Zeeland-West Brabant court recently ruled.
Spinning classes
The case concerns a lady who provides spinning classes for a gym. Because she has been declared personally bankrupt, she provides the spinning classes on behalf of a BV (which operates an agricultural business), of which her children hold all the shares through a holding company. She receives no salary from the BV.
However, as a result of an audit carried out, the tax authorities impose additional income tax assessments (and income-dependent health insurance contributions) on the spinning instructor in which the income is taxed as income from other activities (the tax is increased by tax interest and a penalty).
The court upheld these assessments. On behalf of the spinning instructor, it was stated at the hearing that she wanted to prevent the income from the lessons from going into the bankruptcy estate and that she wanted to help her children. According to the court, there is no doubt that, had it not been for her personal bankruptcy, she would not have allowed the income to accrue to the BV.
Reversal of burden of proof and fine
Court finds it plausible that Ms knew that she had to declare the income from the spinning classes in her income tax return and that she was aware that she would keep a substantial amount out of income tax. Therefore, the court reverses the burden of proof and the inspector can suffice with a reasonable estimate of the income earned. The fine imposed is upheld.