A] Prelude
Popular travel facilitator Booking.Com is based in Amsterdam. The employees participated in the investment based company pension plan at PPI Be Frank.
The plan included a very modest constant old age pension premium with the voluntary option for the participants to if so desired invested a little additionally with tax benefits.
Due to the very modest pension claim and as there was by far not the option to use all tax benefits, many employees preferred to get an additional Dutch Private Pension Plan in order to use those very relevant tax benefits.
B] Legal Dispute Booking.Com/Pension Fund PGB
Booking.Com was contacted by Dutch Branch Pension Fund PGB that according to mandatory law it was obliged to participate in the fund.
Booking.Com responded with a denial stating that as 80% of their 4.000 employees were working as IT specialist, the travel branch pension fund was not applicable to them.
C] Court Verdict Jan 2024
The Dutch Court ruled in Jan 2024 in favor of PGB as it qualified the company as travel agent.
Which means that Booking.Com has the obligation to retro-actively participate in the fund as of January 1999. Which is expected to cost the company rounded 405 million euro. Tax deductible for corporate tax no doubt but still substantial.
D] Lesson For Companies
This verdict is a fine example for companies that want to install their own company pension plan that before doing this, it seems advisable to first carefully check if there are any existing mandatory Dutch pension funds applicable.
E] Tax Implications For Employees With Private Plans
The employees who have acquired Dutch Private Pension Plans in order to use all tax benefits are now faced with the situation that the amount of tax max premium per year in the past and as of now will change substantially and will maybe even disappear completely.
What does this mean? In theory the fact that the participants will now get a pension fund pension claim will mean that the already received Dutch tax benefits on those private pension premium payments and possible exemptions for Box 3 will have to be changed read reduced or maybe even totally revoked.
It will be interesting to see how the related parties will try to solve this issue in a correct but also manageable manner!