Contacts with the legislator

Advisory opinions on legislative proposals

The President of the Supreme Court and the Procurator General at the Supreme Court may provide advisory opinions on draft legislative proposals at the request of the Minister of Justice and Security. As a rule, advisory opinions are given on proposed legislation relating to the organisation of the judicial system and coordination within it, and on changes to procedural law. These advisory opinions are politically neutral.

The choices made in the advisory opinions take into account that the President and the Procurator General cannot anticipate future proceedings before the Supreme Court regarding the interpretation and application of provisions that have been proposed and may become law. The joint responsibility of the three branches of government for human freedom and dignity, the principles of the democracy governed by the rule of law, and the values of the European Union are also taken into account.

The advisory opinions issued are published on the Supreme Court's website. In 2024, the President and the Procurator General published three advisory opinions on the merits of proposed legislation. These are:

• Advisory opinion on Temporary decision experiment proximity judge
• Advisory opinion on legislative proposal regarding whistleblowing policy in the judiciary
• Advisory opinion on legislative proposal regarding strengthening of the Dutch General Administrative Law Act guarantee function

Dialogue

As an institution, the Supreme Court fulfills an autonomous role in the good relations between representatives of the three branches of government. The President of the Supreme Court and the Procurator General at the Supreme Court perform a linking figurehead function that manifests itself mainly in contacts and conversations. Good relations contribute to mutual respect and an understanding of one another's responsibilities in polity and society. A direct dialogue between representatives of the branches of government allows for an exchange of views on the shared underlying responsibility for the function of the law in upholding human freedom and dignity, the principles of the democracy governed by the rule of law, and the values of the European Union.

Such a dialogue does not concern pending or future cases, but concerns topics that promote the understanding of and insight into one another's work. What information does one need about the nature of the other's work in order to do one's work as effectively as possible? An example is the participation of the President of the Supreme Court in the dialogue between the branches of government that took place on 10 June 2024 upon the presentation of the report by the Government Committee on the Rule of Law established by the government. Over the course of the year, the content of the Supreme Court's annual report was regularly used as a tool in the dialogue with representatives of the legislative branch.

Signals to the legislature

Since 2017, the Supreme Court's annual report has included an overview of decisions that draw the legislature's attention to a specific problem. In 2024, there were seven decisions (2020: 8 decisions; 2021: 10 decisions; 2022: 10 decisions; 2023: 6 decisions).

The selection of such decisions is not based on a systematic approach. The overview is provided in light of the Supreme Court's duties of promoting the uniformity and the development of the law and offering legal protection. The executive, legislative and judicial branches of government each have their own responsibilities under law when legislation is drafted. They all share an interest in effective legislation that offers legal certainty to those seeking justice and to society as a whole. In serving this interest they also interact with each other. Effective interaction between the three branches of government will, among other things, promote the quality of the law, as well as the rate at which bottlenecks in the law can be recognized and resolved.

As part of that interaction, the Supreme Court may decide to include signals for technical legal issues concerning the application of legislation that arise in the cases it hears. Passing on signals can help society and those involved in the administration of justice to recognise what legal and technical problems the Supreme Court encounters in practice. Signals are intended as an aid, alongside the weekly publication of Supreme Court decisions on rechtspraak.nl. It is up to the legislature to decide whether it wants to respond to a signal from the Supreme Court, for example with a legislative procedure or through a dialogue between co-legislators. If the legislature has already responded to a judgment of the Supreme Court before that judgment is included in this section, then mentioning that response to the signal can further illustrate the dialogue between the branches of government.

The signals to the legislature in the Supreme Court's annual reports are of a variable nature. This may include, for example, the indication of legal problem areas, but it may also concern the identification of deficiencies in the law. Examples of points meriting attention that are of a technical legal nature include gaps in statutory law, rules that contravene higher-ranking rules, unclear regulations, or regulations that are not sufficiently harmonised with one another. Addressing a shortcoming in the law stems from the Supreme Court's duty to provide legal protection and promote the development of the law.

Signals from the Supreme Court to the legislature are unrelated to choices that are not up to the court, such as political choices. Sometimes the Supreme Court can provide a solution to an identified bottleneck in its decision, while remaining within the boundaries of its tasks. In other cases, the decision will indicate that this is in fact impossible or undesirable under the applicable law. Signals from the Supreme Court to the legislature are confined to questions that the Court encounters in its case load.

Judgments

Supreme Court 9 April 2024, ECLI:NL:HR:2024:566

If community service is ordered in the commission of two or more criminal acts resulting in two or more separate offences, then in addition to the hours of the community service can the hours of the substitute detention also accumulate? In the advisory opinion, the Advocate General took the position that in the commission of two or more criminal acts resulting in two or more separate offences the maximum of four months of substitute detention also applies. However, the Supreme Court has interpreted the legal system in such a way that in the event of the commission of two or more criminal acts resulting in two or more separate offences the court may exceed that maximum, as the legislation contains no restriction. The Supreme Court is of the opinion that it is up to the legislature to determine whether a scheme similar to the scheme for, inter alia, fines should be provided for community service, or a different type of scheme of capping substitute custody in the case of community service, if it concerns the commission of two or more criminal acts resulting in two or more separate offences.

Supreme Court 19 January 2024, ECLI:NL:HR:2024:49

This case involved a restriction on the possibility to set off dividend tax against corporate income tax.

If a company established in the Netherlands distributes dividends, dividend tax is withheld. A recipient of the dividend can, under certain conditions, set off the withheld dividend tax against the Dutch corporate income tax due.  In that case, the law requires that the taxpayer receiving the dividend is both the direct beneficiary or the beneficiary through depositary receipts as well as the ultimate beneficial owner of the dividend on which dividend tax has been withheld. The requirement of ultimate beneficial ownership is included in the law as a measure against what is referred to as dividend stripping. Dividend stripping entails that a shareholder transfers the right to dividends to another person who has a more favourable right to a refund, reduction or tax credit with regard to the dividend tax withheld than the original shareholder. The law describes a certain situation where the taxpayer receiving the dividend is not considered the ultimate beneficial owner. The Supreme Court held that that description contains an exhaustive regulation of the cases in which the person entitled to the dividend is not the ultimate beneficial owner after all. Although the legislature wanted to leave it up to the courts to further establish the concept of ultimate beneficial owner, it cannot be inferred from the legislative history what conditions or requirements and circumstances the legislature had in mind in this regard. Cases that cannot be considered to fall under that exceptional situation defined in the law are therefore not covered.

Article 25 Corporate Income Tax Act 1969, which applies in this case, has meanwhile been amended.

Supreme Court 22 March 2024, ECLI:NL:HR:2024:470

The District Court of Zeeland-West-Brabant referred a question to the Supreme Court for a preliminary ruling of how the part of an elderly person's tax credit to be taken into account when calculating national insurance contributions must be calculated for a non-resident taxpayer who is liable to pay contributions in the Netherlands. The Supreme Court held that, according to the statutory methodology in calculating the national insurance tax credit for a non-qualifying, non-resident taxpayer, the person's income subject to contributions is not always fully taken into account. That income (the contribution base) legally consists, even for non-resident taxpayers (i.e. taxpayers living outside the Netherlands), of the worldwide income from employment (the taxable income from work and home, determined according to the rules of Chapter 3 Income Tax Act 2001). The Supreme Court ruled that said statutory methodology, in the context of income-dependent components of the national insurance tax credit, such as the elderly person's tax credit, does not allow for also taking into account the worldwide income, even though it would be obvious to do so.

Supreme Court 12 July 2024, ECLI:NL:HR:2024:1060

In a dispute regarding the question of whether training costs could be deducted from income tax, the District Court ruled in favour of a foreign student. The Inspector was ordered to pay the costs of the appeal proceedings. Those costs were determined in accordance with the Legal Costs (Administrative Law) Decree. In that Decree, a fee of EUR 296 per point (procedural act) was assumed for tax cases in the objection phase, and a fee of EUR 597 per point for other administrative cases. In the Supreme Court's view, this distinction between the two rates was not sufficiently explained by the legislature. As a result, it is not clear that and why that lower fee is justified for all tax cases. Therefore, the administrative court cannot assess whether that Decree is to that extent discriminatory and contrary to Article 1 of the Constitution. To prevent the courts from applying the lower fee in violation of the discrimination prohibition to the detriment of an interested party in tax cases, the Supreme Court finds it appropriate for the courts to disregard that lower fee.

The Legal Costs (Administrative Law) Decree has since been amended and it no longer makes any difference for the compensation per point whether it  concerns a tax case or another case under administrative law.

Supreme Court 11 October 2024, ECLI:NL:HR:2024:1422

An interested party trading in used passenger cars applied for and – wrongly – obtained refunds of private motor vehicle and motorcycle tax on the basis of Article 14a of the Car and Motorcycle Tax Act 1992. The Inspector therefore imposed an additional tax assessment and fine on him, based on Article 67f Dutch General Tax Act. The Court of Appeal upheld that fine on appeal. The Supreme Court set this judgment aside on appeal in cassation ex officio. The interested party had not paid the wrongly refunded amounts of private motor vehicle and motorcycle tax in their capacity as a taxpayer. As a result, it was not legally possible to impose a fine on him based on Article 67f Dutch General Tax Act, because Article 67f(6) Dutch General Tax Act lacks a reference to Article 20(2), first sentence, Dutch General Tax Act (on additional tax assessments imposed on someone other than the taxpayer).

Supreme Court 15 November 2024, ECLI:NL:HR:2024:1657

An interested party who was partially incapacitated for work received, in addition to wages from his employer, a work resumption benefit for persons partially fit for work (WGA benefit) as referred to in Chapter 7 of the Work and Income (Capacity for Work) Act (WIA). The Employee Insurance Agency UWV paid the WGA benefit directly to the interested party. If it had been paid by the employer, the WGA benefit would have counted towards the calculation basis for the employed person's tax credit. This is not the case if the benefit was paid by the Employee Insurance Agency UWV. This distinction was caused by the applicable legal provisions. The interested party was of the opinion that the distinction was contrary to the treaty-based prohibitions on discrimination set out in Article 14 ECHR in conjunction with Article 1 of the First Protocol to the ECHR, Article 1 of the Twelfth Protocol to the ECHR and Article 26 ICCPR. The Supreme Court held that, even when taking into account the broad discretion vested in the legislature, the distinction could not be considered justified and is contrary to the prohibition on discrimination in the said treaty provisions. The Supreme Court did not offer judicial remedy to the interested party for this treaty violation, as there were several options for achieving equal treatment. A choice between the alternatives was beyond the Supreme Court's duty to develop the law in the given constitutional relations, given the court's restraint observed therein. For the time being, the Supreme Court left it to the legislature to correct this deficiency in the law. Meanwhile, the government has taken a position on the matter.

Another tax case in which the Supreme Court established the existence of a treaty violation and held that, for the time being, it is up to the legislature to correct the deficiency in the law concerns the judgment of 6 September 2024 (ECLI:NL:HR:2024:1130) on the levy of inheritance tax if extramarital children inherit. On this case, see in this annual report the section The Supreme Court, The Tax Division.