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Divorce and inheritance news for expats

Are you an international (expat) in the Netherlands? Are you going through a divorce? Have you received an inheritance or gift? If your answer to these questions is yes, read on…

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The Hague: international city of peace & justice

With the 100th anniversary of the Peace Palace the international allure of The Hague is very well visible. Besides the International Court of Justice and the Permanent Court of Arbitration, The Hague has another 200 international organisations, and 111 embassies and consulates. For centuries, The Hague has been the city of Peace and Justice with the international legal order taking a leading role. No wonder GMW lawyers often has to deal with international law.

International city of Peace & Justice

The various international institutions situated in The Hague include the OPCW (Organization for the Prohibition of Chemical Weapons), the ICC (International Criminal Court) and the ICTY (International Criminal Tribunal for the former Yugoslavia).

The Hague also has several academic institutions in the field of international relations, international law and international development, united in the so-called The Hague Academic Coalition. The Hague is, after New York, the most important city of the UN (United Nations). Also established in The Hague are Europol and the European Patent Office.

The Hague is a governmental city and the large presence of international institutions attracts new institutions with a diplomatic or intergovernmental status. There are more than 18.000 residents of the Hague working towards world peace. GMW lawyers supports these (international) employees and organisations and in this way contributes to the international and legal character of The Hague.

How did all these organizations end up here?

Ever since the establishment of the government of the Republic of the Seven United Netherlands in the 16th century, The Hague has offered accommodation to foreign diplomats. The international history makes The Hague very special.

Hugo Grotius (1583-1645) was a lawyer in The Hague who made the Netherlands a guiding country for international relations. In his most famous work “The Rights of War and Peace” (1625), he established legal limitations to the destruction of war. This document is still the basis of modern international law.

Tobias Asser (1838-1913), Dutch lawyer and later Nobel prize winner, set up the The Hague Conference of International Private Law. In line with this, the first edition of The Hague Peace Conference took place in 1899. This then led to the establishment of the Permanent Court of Arbitration. Subsequently, the Peace Palace was built to accommodate this new Court of Arbitration. With the establishment of the ICC (International Criminal Court) after the Second World War, The Hague became a magnet for other intergovernmental institutions.

Characteristics of international organisations

The establishment of international organisations is generally governed by the conventions in which these organisations are founded. This means that in principal these organisations only have to comply to the terms of their own treaty and to the general regulations of national and international law.

The independency of international organisations is revealed by their special privileges and immunities. Due to these special privileges, the host state does not have (full) legal authority over them. In a procedure, a judge in The Hague may declare himself unauthorised over an international organisation. Furthermore, buildings of international organisations are inviolable. This means that Dutch authorities may not enter these buildings without permission.

Mini states and their personnel

With the various international organisations, The Hague actually has a large collection of mini states. What does this mean for the people who work there? First of all, immunity also applies to the personnel of the mini states. There are some exceptions to this immunity, namely if a member of the personnel buys a house or gets married. In that case Dutch law applies.

This is quite different when it comes to Dutch employment law. International organisations have their own internal employment law rules. Only in exceptional situations a judge may be authorised to review a case relating to employment law, namely in the case of demonstrable violations of human rights. Either way, authorities may use diplomatic pressure to make sure that Dutch laws will be respected.

 

Contact

Please do not hesitate to contact us with any questions or for more information.

 

Misconceptions in international family law

More and more, people find love across the border. They fall in love with someone living abroad or with a different nationality. While the relationship flourishes all is fine, but what if the marriage fails? Divorce is a difficult process in many ways – a low point in anyone’s life. On top of this, an international divorce involves extra complications. People have various questions concerning divorce. So, what are the biggest misconceptions when it comes to international divorce?

Misconceptions

Most people are unfamiliar with Dutch International Private Law. Consequently, there are various misconceptions concerning the possibilities for divorce and divorce settlement:

1. The divorce settlement will take place in the country of my marriage.
In the Netherlands, the place in which the marriage was contracted is not relevant to the competence of the court nor to the applicable law.

2. Returning to my home country with the children isn’t child abduction.
It is not child abduction if you have the permission of the other parent (who has custody) to leave. However, he or she might not give his/her consent. In this case, you have the possibility – and the duty – to ask the court for substitute consent.

3. Any lawyer is able to handle international divorces.
No, family law is a discipline of its own. Thus, hiring a specialised family lawyer is an absolute must. Specifically, involving a lawyer with an international family practice would be beneficial.

4. If divorce takes place in the Netherlands, this will be settled according to Dutch law.
No, for each individual subject the court determines which law is applicable. This is based on various national and international rules – this could even be a foreign legal system.

5. I don’t need to respond to documents from foreign courts because they can’t affect me.
No, this is not true, please do respond. Ignoring such documents can lead to a foreign Court Order being made in which, for example, you are to pay sky-high alimony. In most cases execution of a Court Order like this takes place in the Netherlands.

6. The reason for divorce matters.
According to Dutch law it isn’t relevant. In some countries, for example the UK, the reason for divorce could be important for the arrangement of alimony or division of assets. However, in the Netherlands it is not.

 

This article was updated November 2017.

 

International Child Abduction

Abduction can be extremely damaging for a child and is never the solution to a problematic situation.

International Child Abduction Centre

the International Child Abduction Centre (IKO) is a Dutch agency that serves as the first port in abduction-related matters. There are cross-border mediators affiliated to the IKO who specialise in abduction cases as well as related issues, such as moving abroad with children etc. It’s always preferable to seek an amicable solution first, instead of taking the law into your own hands.

Lawyers working together

In abduction cases, it’s advisable to make use of a lawyer in the Netherlands, but also of one in the country where the child is actually staying. Proceedings for the child’s return will namely have to be commenced in that country.

At the same time, there may be a need for certain proceedings in the Netherlands to enable the child to be returned. These proceedings could involve: applying for emergency documents, issuing a temporary care order for the child, determining the child’s habitual residence, and change of custody. It is necessary to work with specialised child abduction lawyers to seek the best possible solution for the child.

Central Authority

Since 1 January 2012, the parent who is left behind is also required to appoint a lawyer.  Previously, the Central Authority represented that parent, but this is no longer the case. However, there are still plenty of ways in which this agency can assist you. The Central Authority mediates in international family cases involving children and has a wealth of expertise.

Contact

Often, several different experts and organisations (such as psychologists and the police) are involved in abduction cases. The most important thing is to never lose sight of the child’s interests.

If you are in an abduction situation because you have taken your child away without the consent of your former partner or because you are confronted with the abduction of your child, do not hesitate to get in touch with us.

 

This article was updated November 2017. 

 

Internationals filing for divorce in the Netherlands

Internationals filing for divorce in the Netherlands are often stunned by the far-reaching financial consequences of Dutch marital property law, more specifically the Dutch ‘regime of community of assets and property’. 

In the Netherlands, for marriages with an international dimension (entered into after 1 September 1922), there are strict regulations on whether the marriage in question is subject to Dutch marital property law or to the corresponding law of another country. The following example will illustrate the importance of being aware of this.

Example

A British couple, married in 1994, moves to the Netherlands in 1998 and lives there ever since. Which matrimonial property law is applicable during which period?

Well, strange as it may seem, English law applies for the first 14 years of their marriage (1994 until 2008). After 2008, having lived in the Netherlands for 10 years, the Dutch rule of ‘community of property’ applies to the marital property. This means that, in the unfortunate event of a divorce in 2010, all property and debts acquired after 2008 need to be divided amongst the spouses.

The financial consequences are far-reaching. They would have been completely different if the couple had gotten divorced prior to 2008 or the marriage had taken place before 1 September 1992. 

What can you do to avoid this?

You can avoid the rule of ‘community of property’ by concluding a prenuptial agreement with your spouse. In the contract, you need to designate which country’s law should apply to your marital property. If Dutch law is applicable, concluding a pre- or post-nuptial agreement prevents your assets from becoming community property. On the termination of your marriage by divorce, the debts and assets are divided according to the terms of the contract.

Dutch nationals living abroad

Furthermore, Dutch nationals living abroad often assume that the Dutch ‘community of property’ rule is applicable to their marital wealth if they were married in the Netherlands and did not sign a prenuptial agreement. This, however, is often not the case and can make things messy and complicated. A Dutch couple married under Dutch law but filing for divorce in a foreign country might find that the international private law of the host country overrules the provisions of Dutch family law. This is most often to the detriment of the parties.

Conclusion

Thus, whether you are an international living in the Netherlands, or a Dutch national living abroad filing for divorce, be aware of the differing regulations concerning marital property. This can save you from unpleasant surprises and unnecessary complications.

Should you have any further questions regarding your marital property, please do not hesitate to contact us.

 

Place of work determines applicable law

Which national law is applicable when it comes to international employment contracts? Is this the country of the employer, employee, or the country where the organisation is located?

The Rome Convention determines the law applicable to contractual obligations entered into between 1 September 1991 and 17 December 2009. Both this convention, as well as its modernized successor, the Rome I regulation, contain special rules for individual employment and employment contracts.

How is the country of law decided upon?

In first instance, as is laid out in the Rome Convention, the applicable law concerning employment contracts is the law chosen by the parties. However, the employee cannot be deprived of protection in the absence of a choice of law. In the case the parties did not make a choice of law, there are several elements which can determine the applicable law. The Rome Convention incorporates materially the same rule to sub paragraphs a) and b) but it does not prescribe an order between the two.

The contract shall be governed by the law of the country:

a) in which, or from which, the employee habitually carries out his/her work.
b) where the place of business through which the employee was engaged is situated.
c) when it appears from the circumstances that the contract is more closely connected to a country other than that indicated in paragraphs a or b, the law of that other country shall apply (rule of exception).

Modernization by the European Court of Justice
In 2013, in two cases concerning the transport and maritime sector, the court ruled that sub-paragraph b) only becomes relevant when it is not possible to determine the applicable law using the criterion of the place “where the employee habitually carries out his work”. This criterion must be interpreted broadly, which is especially relevant in relation to the transport and the maritime sector, as employees often work in many different countries in these sectors.

Indicators include the place where from the employee embarks the means of transport and whereto he returns afterwards, the place where he takes instructions, where he organizes his work and/or where tools are stored.

Only if these indicators do not allow the determination of the applicable law, does b) apply: the law of the place of business of the employer. Only procedural facts are to be taken into account when determining the place of business, not factors related to the work of the employee. Furthermore, the place of business must have a permanent character.

Killing two birds with one stone
With the ruling above, the court has given an important interpretation to the Rome Convention, as well as to Rome I. Firstly, the Rome Convention is now modernized, as a fixed order must be deemed to exist between sub-paragraph a) and b). Secondly, it seems reasonable that the indicators which are to be taken into account when applying sub-paragraph a) and b) are also applicable in relation to Rome I.

Furthermore, a third ruling is expected, as the Dutch Supreme Court has posed prejudicial questions concerning the rule of exception. Hopefully, this ruling will introduce even more clarity in relation to the Rome Convention and Rome I. To be continued.

Please, do not hesitate to contact us if you have any questions.

Update article: December 2017

 

Comparative law study: spousal maintenance part 1

In the English magazine ‘Family Law Journal’ (September 2012 no. 119), lawyers from various states compare and contrast the approach to spousal maintenance (alimony). These were Julian Bremner from Rayden Solicitors, England, Kate Mooney from Derwent &Tamar Chambers, Tasmania, and Marjet van Yperen-Groenleer  from GMW lawyers (Legal Expat Desk), the Netherlands. Together, these lawyers compare the legal systems of England and Wales, the Netherlands and Australia.

There are major differences and the financial implications can be quite substantial. Therefore, for expats living in the Netherlands considering to file for divorce, it is advisable to first examine in which country they should do so. This could be either their home country or the Netherlands.

England, Wales and the Netherlands 

In this first analysis, the focus lies on the differences and similarities between England, Wales and the Netherlands. Click on the link for the analysis: comparative law study spousal maintenance. 

Also, LED lawyer Marjet Groenleer has previously blogged about this subject in ‘International divorce: in which country should proceedings be conducted?’.

 

Update of this article: November 2017. 

Tax aspects in international divorce

It is important for one to be familiar with the tax aspects of an international divorce when filing for divorce. Thus, it is advisable to seek tax advice during (international) divorce proceedings.

Tax aspects in a national scenario

In (plain) national situations, for the payer, spousal maintenance is tax-deductible, meaning that it is deducted from his or her taxes. On the other hand, the recipient is taxed on the basis of a progressive tax rate (meaning the tax rate dependent on his or her income level). For child maintenance other rules apply. Child alimony is not tax-deductible for the payer, but also not taxed for the recipient.

The spouses could agree on a lump-sum payment of the spousal maintenance, meaning a single payment as opposed to a series of payments. The recipient is taxed on the lump-sum at once, based on the progressive tax rate. For the payer, the lump sum is only tax-deductable when the amount of the lump sum is paid to the ex-spouse. This means that the lump sum must be paid at the moment the divorce is registered. The disadvantage of the progressive taxation can be cushioned by filing a petition for the so-called “middeling” (averaging).

It is also possible to come to a buy-out agreement of the spousal maintenance by allocating possessions in the year of the divorce. The transfer of possessions and the petition for divorce must take place in the same calendar year. If there is a tax advantage on these possessions, it is possible for the payer to use the tax deduction.

Tax aspects in an international scenario

In many foreign countries, spousal maintenance is not or barely deductable. Suppose a maintenance debtor gets employed in a foreign country, for example an expat. In general, he will be qualified as a non-resident taxpayer. This means that he is only taxable in the Netherlands as far as he has Dutch income. Dutch income is formed by income from working and living in the Netherlands, and income from savings and investments in the Netherlands.

If the non-resident taxpayer keeps his house in the Netherlands (leased or not), this house will be taxed. If he is obliged to pay spousal maintenance, this maintenance is not deductible from his Dutch income. This tax-deductible item is explicitly excluded in Dutch tax law. If his former wife lives in the Netherlands, the spousal maintenance she receives is taxable for her. In this situation spousal maintenance is taxable, but not deductible!

In this specific case there is a possibility too, if things are well structured, to realise a net lump sum. During the year of the divorce, the non-resident taxpayer opts for resident taxpayer status. This choice automatically applies to his former wife. In the tax return for the year of the divorce, the tax deductible item will be allocated to the recipient, with the result that recipient receives the lump sum net.

Advice

Good tax planning can limit and often prevent tax disadvantages. Agreement on the tax return for the year of the divorce is a must!

 

This article was updated November 2017.

International divorce: cross-border legal cooperation

GMW lawyers and the Legal Expat Desk serve clients across the globe. Cross-border cooperation in the practice of law is reflected in the growing number of divorce cases with an international dimension. GMW lawyers represents expats who, for example, want to arrange their divorce in the Netherlands, or who are forced to do so by their spouse.

Dutch citizens abroad

GMW lawyers also regularly represent Dutch citizens who are in the midst of divorce proceedings in another country. Sometimes the proceedings take place in the Netherlands as well as abroad. This can happen when a Dutch court does not have jurisdiction in respect of all aspects of the proceedings. To illustrate this:

A married Dutch couple living in France with their children can file for divorce in the Netherlands. However, a Dutch court does not have jurisdiction to make provisions for the children (with regard to e.g. access or visitation rights). If the parties are unable to reach agreement amongst themselves concerning the children, they will have to take action in France.

In the interest of coherence (for the broader context of the divorce), it may be advisable to maintain good contact with the other lawyer, in this case in France. We advise and consult one another. This cooperation is not only interesting and instructive, but also extremely valuable to the client.

We advise Dutch nationals who divorce abroad (under certain circumstances) to consult a Dutch lawyer. This way, they can also get an insight in the question of whether Dutch law recognizes foreign rulings or judgments.

Foreign lawyers

It also works the other way around, with GMW lawyers writing legal opinions for lawyers abroad. During divorce proceedings conducted abroad, certain aspects of the divorce could be subjected to Dutch law. The regulations of private international law of each country determine which law is applicable to the various aspects of the divorce.

It occurs frequently that foreign lawyers have to deal with a divorce property settlement in accordance with Dutch law. The general community of property, for example, is one facet of the Dutch legal system that is unique in the world. Therefore, we frequently need to explain this to a foreign audience.

Do you need help with an international divorce? Contact us – we’ll be glad to assist you.

This article was updated November 2017.