In 2012 the Supreme Court ruled that it was not permissible to fix the “customary salary” earned by a director cum controlling shareholder using the skimming method where the private limited-liability company in question employed multiple staff. It was the Amsterdam Court of Appeal which in the wake of this ruling was asked to determine whether the inspector of taxes had rightly adjusted the level of the director cum controlling shareholder’s salary on the basis of the “customary salary” scheme.
The inspector subsequently intended to calculate the “customary salary” by attributing all of the private limited-liability company’s turnover to the professional performance of the company’s director cum controlling shareholder, taking the company’s operating result inclusive of the director cum controlling shareholder’s salary and exclusive of capital reimbursement as his point of departure in calculating the director’s “customary salary”. According to the inspector the entire amount was attributable to the director’s occupational performance, which prompted him to fix the director’s salary at 260,000 euros. The inspector by way of alternative calculated a market-led remuneration in the amount of 50% of the company’s turnover. Subject to due allowances being made for the statutory efficiency margin, the director cum controlling shareholder’s salary was supposed to turn out at a minimum of 245,000 euros.
The Amsterdam Court of Appeal ruled that the inspector had failed to abide by the Supreme Court ruling: given that he was not allowed to apply the skimming method, he should have based his substantiation of a higher “customary salary” on other data than the company’s revenue, but had failed to do so.
When a private limited-liability company employs more staff than just its director cum controlling shareholder, by contrast to the inspector’s presumption there is no question of the refutable suspicion that the revenue of the company has not been brought about in its entirety as a result of the director’s professional performance.