Tax Division

Cost of stairlift deductible as specific care costs?
In this case the person concerned arranged for a stairlift to be installed in his house in 2013 and deducted the cost of it in his income tax return as specific care costs. He had not applied for an  allowance towards the cost of the stairlift under the Social Support Act (WMO), believing that he was not eligible due to the level of his income and that of his partner.

Section 6.17 of the Income Tax Act 2001 contains a provision allowing for the deduction of care costs in the income tax return. These must be specific care costs incurred in purchasing medical aids or medicines on account of illness or disability. However, under section 6.18, subsection 1, opening words and (d) of the Income Tax Act 2001, the co-payments due under the WMO are not deemed to be specific care costs.

The tax inspector refused to accept the deduction of the cost of the stairlift, relying on section 6.18, paragraph 1 (d) of the Income Tax Act 2001. It made no difference, according to the tax inspector, that the person concerned had not actually applied for an allowance under the WMO.

The Supreme Court held that the cost of the stairlift was deductible according to the letter of the law. In its view, the parliamentary history of the Act provided insufficient grounds for giving a broader interpretation to the restriction on deductibility laid down in section 6.18, subsection 1 (d) than the natural meaning of the words. The interested party was therefore permitted to deduct the cost of the stairlift.

The restriction would therefore only have been applicable if the person concerned had actually been granted an allowance under the WMO and been required to make a co-payment. Section 6.18 of the Income Tax Act 2001 has since been amended. A stairlift is no longer classified as a deductible aid. It has been pointed out in the professional literature that this Supreme Court judgment may still be of relevance to other types of medical aid.

HR 31 januari 2020, ECLI:NL:HR:2020:167 (Supreme Court, 31 January 2020)

Income-related combination tax credit
Subject to certain conditions, working parents who share childcare but do not cohabit may both be eligible for the income-related combination tax credit (IACK). Under section 8.14a, subsection 1 of the Income Tax Act 2001, a working taxpayer whose child who has been registered at the same address as the taxpayer in the personal records database for at least six months in the relevant calendar year is eligible for this tax credit. The cases in which a child who is not registered at the same address as the taxpayer is deemed to be thus registered for the purposes of this tax credit are laid down by ministerial order. Following earlier rulings by the Supreme Court (e.g. HR 2 november 2001, ECLI:NL:HR:2001:AD5044 (Supreme Court, 2 November 2001), it was laid down in article 44b of the Order implementing the Income Tax Act 2001 (URIB 2001) that a child belongs to the household of each parent simultaneously if the child spends at least three days a week with each parent.

The case in question concerned the application of the IACK in 2015. The child resided alternately with her mother and father. She was registered in the personal records database at her mother’s address. The custody arrangements provided for a two-weekly schedule: starting from Monday in the first week, the child spent two days with her father, then two days with her mother, then four days with her father and six days with her mother. The appeal court had ruled that the father was not entitled to the IACK because his daughter did not usually spend three whole days per week in each household.

On the basis of the parliamentary history of section 8.14 of the Income Tax Act 2001, the Supreme Court held that both parents were entitled to the IACK if they shared the care of the child equally in a permanent arrangement that was different from that laid down in in article 44b of the URIB 2001. This article did not present any obstacle to such an arrangement since it had been formulated in line with previous Supreme Court judgments and must be considered against the background of the same parliamentary history as section 8.14 of the Income Tax Act 2001.

This judgment illustrates the constant interaction between legislation, implementation and case law: after judgments of the Supreme Court have been transposed into implementing legislation, the question arises at some point of whether that implementing legislation is appropriate for other cases also covered by the legislative provisions under which those judgments were given.

The central issue in this case was whether in the context of eligibility for the tax credit, sufficient account had been taken of the parents’ desire to share the care for their child and to make the necessary arrangements as they saw fit. Since then, article 44b of the URIB 2001 has been amended.

HR 13 maart 2020, ECLI:NL:HR:2020:415 (Supreme Court, 13 March 2020)

Social housing landlord is an interested party in dispute under the Valuation of Immoveable Property Act
In tax cases the principle applies that only the person to whom a decision is addressed can lodge an objection against it or apply for judicial review. In proceedings relating to the Valuation of Immovable PropertyAct (WOZ Act) the question may arise of whether a third party nevertheless has an interest in being able to contest the WOZ value of a particular property, since that value is relevant to a number of regulations. Over the years, the Supreme Court has handed down a number of rulings on this issue. The 2019 annual report featured just such a judgment (HR 13 september 2019, ECLI:NL:HR:2019:1315 (Supreme Court, 13 September 2019) in this section. That case concerned the valuation under the Act of a social housing property. The tenant had lodged an appeal in cassation against the decision on the WOZ value of his home, which was addressed to him. The Supreme Court ruled that the landlord was also an interested party in the tenant’s cassation proceedings, even though this is not specifically regulated by the Act.

The judgment of 20 March 2020 also concerned the position of such third parties with an interest in the proceedings. In 2017 a tenant challenged the valuation under the Act of his rented home. The maximum rent for the property was partly dependent on the WOZ value. The landlord thus also had an interest in the WOZ value, but had not been afforded the opportunity by the appeal court of joining the proceedings. The Supreme Court ruled that the appeal court had provided insufficient grounds for its judgment and referred the case back to another court. This judgment illustrates the fact that there is a need in legal practice for clarification of the position of third parties who have an interest in proceedings under the WOZ Act.

HR 20 maart 2020, ECLI:NL:HR:2020:468 (Supreme Court, 20 March 2020)