Available to expats: the 30% tax ruling
Deriving from the post WW-II economic reconstruction of Europe (Marshallplan 1948-1952), for certain employees with specific expertise, hired from outside of the Netherlands, a special tax arrangement called the '30% ruling' is still available.
This arrangement allows an employer to provide employees with a tax-free allowance of up to 30% of their wages if they meet several of the following conditions:
· the employee needs to have specific knowledge that is scarce in the Netherlands;
· the employee needs to be recruited abroad;
· the employee needs to have at least an HBO degree (School of Higher Professional Education);
· the employee needs to have at least 2,5 years of working experience in a comparable position
· the occupied position needs to require at least an HBO degree candidate;
· the employee fills the vacancy via an intercompany transfer;
· the employee has been granted an Highly Skilled Migrant residence permit
The labour contract/employment statement needs to mention not only the salary but also the allowance of the 30% tax ruling.
Since one of the conditions to obtain a 30% tax ruling is the scarcity of suitable candidates for the employee’s function, the employer needs to prove this. If the employee needs a work permit, this work permit can be used as proof of scarcity, since the CWI (Dutch Labour Board) also checks this before issuing the work permit. If no work permit can be submitted, the employer needs to show recent and extensive recruitment activities for the open position.
The employer can determine who will receive the benefits of the 30% tax ruling, viz. only the employer, only the employee, or both. Our tax specialist can provide you with specific information or apply for your tax-attactive ruling.
Dit stukje gebruiken om door te linken naar bovenstaande tekst (in The Dutch Tax System box): (is een herhaling van de bovenste alinea)
The 30%-ruling is a Dutch tax provision for employees recruited or assigned from abroad (expats). Based on this ruling the employer is allowed to pay the employee 30% of his total remuneration tax-free. The conditions to qualify for the 30%-ruling are the following:
*The employee should be recruited or assigned from abroad;
*The employee should have a Dutch withholding agent;
*The employee should have special skills or expertise that is not or scarcely available on the Dutch labour
market;
*The 30%-ruling has been agreed separately in the employment agreement or an addendum thereof.
For the special skills/expertise test three factors will be taken into account:
1. The education level of the employee;
2. The relevant job experience of the employee;
3. The salary level of the Dutch job compared to the salary level in the home country of the employee
If an employee is assigned to the Netherlands, is member of the middle or top management and is employed within the group for at least 2,5 years, it is assumed that he will meet the special skills test (job rotation).
The 30%-ruling is applicable for a maximum period of 10 years. This maximum application period will be reduced with certain periods of earlier stay or employment in the Netherlands.
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