updated 3/29/2007 9:34:38 AM ET 2007-03-29T13:34:38

A Dutch court has added a new item to the list of activities eligible for tax relief — drug running. Judges in the central city of Arnhem recently declared that a professional fisherman convicted of smuggling drugs could deduct the cost of buying and shipping hashish to the Netherlands from his income on his tax return, national daily De Telegraaf reported Tuesday.

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"We disagree with the local court, so we will go to the Supreme Court to appeal," said Tax Service spokesman Marcel Homan. He did not know when the Supreme Court would issue a final ruling in the case.

Homan declined to give further details, citing privacy rules.

The Telegraaf reported that the smuggler, whose identity was not released, appealed to the Arnhem court after being slapped with a $4.4 million tax bill.

The court ruled that because he had only been convicted of drug running and not trading in drugs he could deduct the cost of buying and transporting the drugs on his tax form. That cut his tax bill to $2.4 million — a saving of $2 million.

Small amounts of drug allowed
Under Dutch law, marijuana and hashish are illegal but police don't fine smokers for possession of less than one-sixth of an ounce or prosecute for possession of less than one ounce. Authorities look the other way regarding the open sale of cannabis in designated "coffee shops."

But growers are subject to raids and prosecution, meaning the officially tolerated shop owners have no legal way to purchase their best-selling product.

The case isn't the first time a court's ruling on taxes has raised Dutch eyebrows. In 2005, judges in the northern city of Leeuwarden ruled that witches can write off the cost of schooling in witchcraft against their tax bills if it increases the likelihood of employment and personal income.

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