Volunteers can receive tax-free “rewards”. However, the application of the volunteer scheme is subject to strict conditions. We explain these conditions in our factsheet regarding the volunteer scheme. Recent case law shows that the tax court also applies these conditions strictly.
Holiday pay
The same applies in the ruling of the South-West Brabant District Court. The interested party in this case is the secretary of a foundation. He receives an attendance fee of €520 per meeting for attending meetings. In 2013, he attended four meetings. The foundation deducted €1,082 in payroll taxes from the gross allowance of €2,080. The secretary received a net attendance allowance of €998.
Volunteer scheme
In his 2013 income tax return, the taxpayer declared €580 as income from work and home (Box 1). Of the total remuneration of €2,080, he declared €1,500 as non-taxable under the voluntary work scheme.
The Tax and Customs Administration has taken a different view from that set out in the tax return. In the tax return, the full gross remuneration of €2,080 is included in taxable income from employment and home (Box 1).
No source
According to the secretary, his work for the foundation was not a source of income. At the hearing, he stated that his work for the foundation had cost him approximately 100. He did not incur any expenses in connection with this work.
The Court finds that the remuneration received amounts to approximately €20 per hour gross. The Court considers such remuneration to be proportionate to the time involved and the nature of the work carried out. It therefore does constitute a source of income.
Partial application
In order to qualify for the volunteer scheme, the allowance must not exceed €150 per month and €1,500 per year. The Court confirms that the gross allowance is the decisive factor in this regard. The gross remuneration received, amounting to €2,080, exceeds this threshold.
The Court also confirms that it is not possible to apply the volunteer scheme on a partial basis. It is not possible for a volunteer to receive €1,500 tax-free and have the excess amount (in this case €580) taxed. If the thresholds are exceeded, the total remuneration is subject to tax.
Principle of good faith
Naturally, the secretary also states that the Tax and Customs Administration made no comments regarding his tax returns for previous years. In 2012, too, he received remuneration from the foundation. The Court ruled that the mere fact that the Tax and Customs Administration accepted the tax return without raising any queries is not sufficient to successfully invoke the principle of legitimate expectations. Furthermore, in 2012, the remuneration received from the foundation amounted to only €1,040 and therefore remained within the limits of the voluntary work scheme.
Cheating
Incidentally, the interested party also accused the inspector of “cheating”. However, the Court does not regard the inspector’s adjustment of his position as the proceedings progressed as improper conduct. Adjusting one’s position in light of the arguments put forward by the interested party is a logical consequence of what is expected of an inspector in such proceedings.
On a cash basis
Some time ago, the same court ruled that the volunteer scheme operates on a cash basis. We describe this ruling in an article published at the end of last year article.