- Director with a Minority Interest Has No Obligation to Insure For the Employee Insurances
- February 9, 2011 | Authors: Mia van Dijk; Eugene Weultjes
- Law Firm: Greenberg Traurig, LLP - Amsterdam Office
A person is covered under employee insurances if he/she is a natural person younger than 65 years and has private or public employment. Employment is defined as an individual who works for a wage where there is an authoritative relationship between the employer and that person.
A case before the Court of Appeal in Den Bosch involves Director A, who holds a minority interest (45%) in a operating company via his personal holdings. The other 55% of the shares are held by Director B via his personal holdings. Both directors are managing directors of the operating company.
In April of 2007, after an audit review, the inspector imposed an additional tax assessment regarding social security contributions because he concluded that Director A had an obligation to insure for the employee insurances. The inspector decided that there was no longer an obligation to insure for the employee insurances from the moment the shareholding structure between the personal holdings was equal (50% - 50%).
Following the Court of Maastricht, the Court of Appeal decided that the inspector, on whom the burden of proof lies, failed to show that there was a private employment relationship between the operating company and Director A. The Court said that, based on previous case law, there is an authoritative relationship because the operating company is operated by the two directors on an equal basis. The fact that Director A has a minority interest in the operating company is irrelevant.