30%-ruling for incoming employees

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The duration of the so-called 30%-ruling for extraterritorial employees will be reduced from eight to five years, as from January 1st, 2019. The period during which the partial non-resident taxpayer status can be applied for and the actual extraterritorial expenses tax-free can be reimbursed will also be reduced from eight to five years. 

Evaluation 30%-ruling

The Dutch government already announced it would shorten the 30%-ruling for incoming employees from eight to five years in its coalition agreement for 2017. Recently, the Dutch State Secretary for Finance announced that the 2019 Tax Plan will include a reduction of the duration of the 30%-ruling from eight to five years as of January 1st, 2019. This was announced as a reaction to the evaluation of the 30%-ruling by research bureau Dialogic.
Furthermore, the Dutch State Secretary for Finance confirmed that the other recommendations will not be adopted; i.e. increasing the 150-km limit of the Dutch Border and a maximum reimbursement for income in excess of € 100.000.

Existing and new cases

It is still uncertain how details of the reduction of the duration of the 30%-ruling, the possibility of opting for partial non-resident taxpayer status and the possibility of reimbursing the actual extraterritorial expenses tax free will work out. The reduction will in any case be applicable as from January 1st, 2019.

It has been announced that this reduction will also apply to employees currently using the 30%-ruling, for whom the duration will also be shortened to five years as of January 1st, 2019. This could result in all current 30%-rulings that already run for at least five years on January 1st, 2019 no longer being applicable as of January 1st, 2019.

Recommendation 

If you have employees with the 30%-ruling, or if you are an employee entitled to the 30%- ruling, we recommend that you determine the possible consequences of the reduction of the duration of the 30%-ruling, the possibility of opting for the partial non-resident taxpayer status and the possibility of reimbursing the actual extraterritorial expenses tax-free. As soon as any new information is known we will inform you accordingly.

If you have any questions in this respect, please contact one of our Wage Tax specialists at Baker Tilly Berk.

Source: Kabinetsreactie evaluatie 30%-regeling, 20 april 2018, kenmerk: 2018-0000061269

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