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Dutch Expatriate Tax Provisions Amended
Foreign workers in Netherlands, with specific skills, can avail a 30% tax relief, i.e. the ‘30% ruling’.
Key Highlights: 30% Ruling
· 30% ruling is applicable on trailing payments. If the payments are made within one month after the month of end of the employment or assignment in the Netherlands, the 30% rule is applicable. The following payments may be eligible for the 30% ruling if the above condition is satisfied:
1. accrued holiday pay,
2. 13th month incentive payment, or
3. payment to compensate outstanding vacation days.
For example: In a situation, an individual leaves the Netherlands in March, trailing payments can be paid under the 30% ruling in April (assuming that the employer withholds Dutch income tax on a monthly basis).
· Non applicability of certain conditions for employees revisiting Netherlands. Recent issues can have an unfavorable outcome for employees who are returning to Netherlands for a new employment or assignment, after a previous stay.
1. In case an individual has previously stayed in the Netherlands for more than 8 months in the prior 24 months period (of return), the 30% ruling would not be applicable.
2. This provision are not applicable for employees who have previously lived in the Netherlands and those who met the 150 kilometer test when they first came to the country for last employment or assignment. This is applicable with retrospective effect from January 1, 2012.
It should be noted -as of 1 January 2012, some employees are no longer eligible for 30% ruling if they have lived in 150 kilometers of the Dutch border for 16 months out of last two-year from beginning of their Dutch employment. Employees have registered court cases regarding this which are pending before the Dutch Supreme Court.
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