Consultant in Oman – Income Reclassified from Business Profit to Employment Income ECLI:NL:RBGEL:2026:2507
Gepubliceerd op:
The Gelderland District Court held that income from consultancy work performed in Oman was employment income rather than profit from business. Applying the Deliveroo framework, the Court found that the consultant worked for one client, followed instructions, reported within the client’s organisation, could not freely arrange substitution and bore little entrepreneurial risk. Although the taxpayer lost his business-profit argument, the employment classification entitled him to double-taxation relief under the Netherlands–Oman tax treaty.
1. Background and Legal Question
The taxpayer had worked as an employee of a Dutch company since 1991. That employment ended on 31 August 2019 under a settlement agreement that included a termination payment of €633,750.
He then registered as an entrepreneur and entered into two consultancy agreements concerning work in Oman. The assignments began in September and November 2019, and the taxpayer personally travelled to Oman to perform them. He received approximately €143,819 for this work in 2019.
In his Dutch income-tax return, he reported the consultancy income as profit from business and applied the SME profit exemption. The Dutch Tax Administration disagreed and treated the payments as employment income.
The dispute therefore concerned two connected questions:
Did the consultant operate a genuine independent business?
If not, did the consultancy agreements qualify as employment contracts under Article 7:610 BW?
The answer also determined which rules of the Netherlands–Oman tax treaty applied and whether the Netherlands had to provide relief from double taxation.
Toelichting
After leaving a long-term employment position, the taxpayer formally became an entrepreneur and performed consultancy work in Oman. He treated the payments as business profit, but the Tax Administration considered him an employee. The Court therefore had to look beyond his business registration and consultancy contracts to determine how independently he actually worked. This classification affected both his Dutch tax treatment and his entitlement to international double-taxation relief.
2. No Genuine Independent Enterprise
The taxpayer worked for only one client. He could not freely appoint a substitute and had to obtain permission before another person could perform the work.
He reported to the client’s representative, followed instructions and bore little debtor or commercial risk. There was therefore limited evidence that he independently organised a business or offered his services to the market.
Toelichting
Registering a business and using consultancy agreements did not automatically make the taxpayer an entrepreneur. In practice, he depended on one client and had little control over the commercial organisation of the work.
3. Consultancy Agreements Classified as Employment
After rejecting the business-profit classification, the Court examined whether the consultancy agreements were employment contracts.
The taxpayer personally worked approximately 40 hours per week at locations designated by the client. He followed established working arrangements, reported to company representatives and performed the work according to their instructions.
He also worked within the client’s organisational structure and submitted timesheets that required approval before payment.
Toelichting
The consultant worked in several important respects like an employee. He personally performed the work, followed the client’s instructions and depended on the client’s approval to receive payment. The title “consultancy agreement” therefore did not reflect the practical reality of the relationship
4. Double-Taxation Relief and Legal Significance
Because the income was classified as employment income, the Netherlands–Oman tax treaty applied under the rules governing employment exercised abroad.
The taxpayer had physically performed the work in Oman. The Court concluded that he was entitled to relief from double taxation and reduced the income-tax and tax-interest assessments.
His appeal was therefore successful, despite the rejection of his claim that the income was business profit. The Court also awarded reimbursement of the court fee and compensation for litigation costs.
Toelichting
The taxpayer lost the classification argument but still obtained a favourable outcome. Treating the payments as employment income meant that the work fell under different international tax rules, resulting in double-taxation relief.
Tijdlijn
Gelderland District Court
Bronnen
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