30% ruling reduced to 5 years?!

We have important news to share with our clients: the 30% ruling is expected to be reduced to 5 years!

Until the end of the year 2018, employees are able to benefit the 30% ruling for a period of 8 years. However, as from  January 1st 2019, the maximum duration will be reduced to 5 years. This was proposed by the Dutch State Secretary of Finance (Mr. Menno Snel). If the proposal will be accepted, it will apply to both new as well as existing cases. This implies that employees who benefit the 30%-ruling in 2018 for 5 years (or longer) will lose their entitlement as of 2019. For the employers, it is important to keep an eye on the duration of the existing ruling of their employees. Use our fast track 30% ruling service in order to apply quickly to the 30% facility!

Additional foreseen changes

Also, the partial non-resident tax status will consequently be reduced to 5 years. At the same time, the proposal also included that extra-territorial cost can no longer be reimbursed tax-free after 5 years. Other conditions of the 30% ruling (such as the 150 kilometer condition) remain unchanged.

This news might come as a bit of a shock and may cause some distress. However, research on this subject showed that the mayority of expats do not benefit the full period of the 30% ruling, as they often stay for a shorter amount of time. Or, in the case they do stay longer than 5 years in the Netherlands, they often opt to settle for an indefinite period of time. And the 30% ruling applies to those who stay temporarily.

In case you wish to receive more information on what this might entail for your employees, please contact us. We are more than happy to assist.

Source: https://www.rijksoverheid.nl/documenten/kamerstukken/2018/04/20/kabinetsreactie-evaluatie-30-regeling

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