Under the 30% ruling an employer can provide a tax-free allowance to qualifying employees recruited or seconded from abroad to cover expatriate expenses. The maximum tax-exempt allowance is set at 30% of the employee’s income that is subject to Dutch tax.
The Dutch Government intends to introduce a maximum calculation base for the 30% tax free allowance as from 2024,which will be based on the maximum remuneration for public officers and officials (in 2022, this was set at EUR 216,000 p.a). The announcement also details a transition period of three years for employees who already benefit from the ruling.
It is anticipated that a bill to this effect shall be submitted to Parliament on Budget Day (Prinsjesdag) in September 2022.
If this plan is implemented, then employers may consider accelerating anticipated recruitments/secondments from abroad, in order to benefit from the transitional rules (provided the employees“s remuneration is well above the intended cap).
Find out more
This article was produced by Karin Chung, Tax Adviser at Loyens & Loeff, the Netherlands, a CELIA Alliance member firm.
Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.
Circular 230 disclosure
To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.