Adjustments to be made to “30 percent ruling” scheme

The Netherlands offers a favourable tax regime for employees having been recruited abroad who meet the relevant requirements. The “30 percent ruling” scheme, as it is called, allows employers to pay out up to 30 percent of their ex-pat workers’ gross wages on a tax-exempt basis, in compensation of the additional costs these employees incur owing to their being temporarily stationed in the Netherlands.

The Dutch Cabinet intends with effect from the first of January 2019 to curtail the term of the scheme from eight to five years. The reduced term will apply to new and existing cases alike. The proposed adjustment of the regime has flowed on from a 2017 assessment of the 30 percent scheme, one of the conclusions of which was that use tends to be made of the scheme for no more than five years by approximately 80 percent of those whom it concerns, with a substantial portion of the residual users of the scheme being shown lastingly to put down roots in the Netherlands.

The draft legislation in adjustment of the existing scheme is to be submitted, as part of the “2019 Tax Plan”, to the Lower House of the Dutch Parliament on the occasion of the State Opening of Parliament on 18 September next.

Dutch version: Aanpassing 30%-regeling aangekondigd