New guidelines – Dutch Ministry of Finance brings more clarity in 30% tax ruling

Estimated reading time 3 minutes

On 12 September 2013 a new Decree of the Dutch Ministry of Finance became effective, replacing the 2005 Decree. The new Decree has retroactive effect from 1 January 2012.

The highlights

• Under specific circumstances, extraterritorial expenses can be compensated tax free after expiration of the maximum term of eight years.
• Employees who take up employment after having studied or having worked on their PhD degree in the Netherlands do not have to satisfy the requirement of being recruited from abroad, provided certain conditions are met.
• The 30%-ruling can not be applied to employment income paid after the end of the term to which the 30%-ruling relates. It is, however, justifiable to argue that this does not apply to payments made prior to 12 September 2013.
• An approval for application of the Wage tax transfer regulations (verleggingsregeling) is not required in situations in which the relaxation rules in the former Decree of 2005 are applied. More information can be found in our earlier article on moving the withholding obligations from the non-Dutch employer to a Dutch group company.

Note that, since a Decree is supposed to be favourable for a tax payer, the retrospective effect from 1 January 2012 may be challenged if the new Decree leaves either an employer or an employee in a worse position.

Resources

Decree on the 30% ruling (in Dutch language)

Earlier Articles on the 30% ruling

Dutch 30% tax ruling under review by European Court of Justice

30% tax ruling no longer limited to one employment relationship

For further information or to discuss the consequences of the above, please contact Rina Driece, on +31 10 224 6 424 at Loyens & Loeff Rotterdam.

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