Dutch 30 percent ruling term-limit reduced starting Jan. 2019
INSIGHT ARTICLE |
On Apr. 28, 2018, the government of the Netherlands provided their 2019 Tax Plan which included a measure to shorten the period granted for the 30 percent ruling from eight years to five years. The new shortened term applies as of Jan. 1, 2019, to new applications as well as to those who currently have an existing 30 percent ruling for a longer term.
The 30 percent ruling was introduced long ago to attract foreign talent to work in the Netherlands. As a strict condition, only foreign talent with specific skills that are not available in the Netherlands qualify for the 30 percent provision which entitles the foreign employee to a 30 percent tax free allowance.
The 30 percent ruling allows for a variety of tax benefits in the Netherlands such as providing for 30 percent of the expat’s salary to be delivered tax-free and the ability to be treated as a Dutch non-resident for other Dutch tax purposes.
It is imperative that companies review the 30 percent ruling period for their current expats on assignment to determine whether the new expiration date applies and whether to adjust tax accruals to take into consideration the increased cost of the assignment.
You may also be interested in
Global mobility requires cross-border tax planning with a global perspective, assignment planning and payroll reporting obligations.
IRS FAQs outline procedures for alien individuals in U.S. to claim the medical condition exception to avoid U.S. resident status.
Time in U.S. counts as time in a foreign country under foreign earned income exclusion for taxpayers who returned to U.S. due to COVID-19.