The 30 percent ruling on tax in the Netherlands
Income tax liability can be a difficult issue in a foreign country, especially in the Netherlands where tax law is often a complicated affair. However, Dutch law also offers interesting benefits to expats in certain situations. The most significant advantage available to expats in the Netherlands is the 30 percent tax ruling. If you or your employees qualify for the 30 percent tax ruling in the Netherlands, this can lead to a substantial reduction in taxable income. At Payroll Works’ Dutch Umbrella Company, our dedicated payroll experts have a great deal of experience dealing with the Netherlands’ 30 percent tax ruling. As a result, we can assist you in applying for tax exemptions and advise you on all aspects of Dutch tax law.
What you need to know about the 30 percent tax ruling in the Netherlands
Under Dutch law, a foreign employer is allowed to reimburse employees for any extraterritorial costs they incur while working in the Netherlands. This, however, is a very complicated administrative procedure that becomes more complex when the number of your employees working in the Netherlands increases. The 30 percent tax ruling in the Netherlands allows employers and employees to deal with this in an easier way. By petitioning the tax office, the employer can invoke the Netherlands’ 30 percent tax ruling and pay out a tax-free cost allowance to their employees. By including this amount (roughly 30%) in the employee’s salary, the employee’s net salary is increased while the cost to the employer remains the same.This is the very essence of the Netherlands’ 30 percent tax ruling.
More information on the Netherlands’ 30 percent tax ruling
In order to be eligible for the 30 percent tax ruling in the Netherlands, an employee must meet certain requirements. Any employee applying for tax exemption under the Netherlands’ 30 percent tax ruling must be hired abroad or transferred within a company, work at a management-level position and hold expertise which is not readily available on the Dutch job market. Also, the 30% tax free allowance cannot be split out from the employee’s existing gross income. Instead, the original income must be reduced to 70%, and the 30% allowance added to it. Other requirements for eligibility may of course apply. If you would like to know more about the 30 percent tax ruling in the Netherlands or need help applying for tax exemption, you needn’t look further than Payroll Works’ Dutch Umbrella Company. We have all the necessary expertise, and our professionals can guarantee the best result in every situation.