The 30% ruling changes from January 1st of 2019

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The 30% ruling is for expats working in the Netherlands rather crucial. 30% ruling changes are therefore of high interest to expats. Recently changes for the year 2019 have been announced.

 30% ruling changes

If you were recruited outside of the Netherlands or seconded by an employer to work in the Netherlands, your employer may provide you with 30% of your salary tax free. Not all of the employees which were recruited or seconded can make use of the 30% ruling. Only when the requirements are met and the employee and employer received the approval from the Dutch tax office, the 30% ruling can be taken into account.

Requirements

These are the 30% ruling requirements:

  1. You have an employment relationship;
  2. In the 24 months before your first working day in the Netherlands, you lived at least 16 months or more 150 kilometres in a straight line from the Dutch border;
  3. You have specific expertise that is not or barely available on the Dutch labour market;
  4. You received the approval from the Dutch tax office;

For a more detailed explanation of these requirements, we would like to refer you to our previous article regarding the 30% ruling.

30%  ruling changes

Maximum term

The decision/approval from the Dutch tax office has currently a maximum term of 8 years. For people who were granted the 30% ruling before January 1st of 2012, the maximum term is 10 years.

The term on the decision/approval letter from the Dutch tax office is less than the maximum term, if you have lived or worked in the Netherlands during the 25 years before the date of arrival.

The following periods in the previous 25 years do not reduce the term:

  • a maximum of 20 working days per year in the Netherlands;
  • holiday, family visit or any other private reason for a maximum of 6 weeks a year or a one time period which does not exceeds 3 months;
  • work or residence abroad as an employee outside of the Netherlands;

 8 years term vs 5 years term

As you may be aware off, lately the 30% ruling changes have been subject of several political discussions. One of the discussions was about a possible abolishment of the 30% ruling. Good news is that the plan is not to abolish the 30% ruling.

However, the maximum term of 8 years is going to be reduced from 8 years to 5 years starting from January 1st of 2019. The term reduction is confirmed in the government coalition agreement.

30% ruling granted before January 1st of 2019

We do not expect the reduction of the maximum term will influence the 30% rulings granted before January 1st of 2019. In the past the 30% ruling changes were published starting on January 1st 2012, the government developed transitional law for 30% rulings granted before January 1st of 2012. The transitional law made is possible for 30% rulings granted before January 1st of 2012, to still take the 10 years (under certain conditions) into account.

Orange Tax Services

My name is Soumaya Touzani and I am the 30% ruling expert within Orange Tax Services. We have extensive experience with the 30% ruling. We would like to determine whether you are eligible to the 30% ruling, request for the 30% ruling on behalf of the employer and employee and answer your 30% ruling related questions.