The Dutch Supreme Court recently ruled that the excessive termination tax due by companies on excessive termination payments is not contrary to international law.
A termination payment is considered excessive if an employee’s payment, in the year in which its employment is terminated and in the preceding calendar year, exceeds the payment the employee received in the second calendar year prior to the year of termination. If the payment is lower than Euro 531,000 (amount for 2014) no excessive severance payment is deemed to exist and no additional excessive tax is due by the company. Otherwise a tax of 75% (as of 2013) is due, as final levy, on the excess payment.
