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 may also offer 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 WePayPeople’s Dutch Umbrella Company, our dedicated payroll experts have a great deal of experience in dealing with the Netherlands’ 30 percent tax ruling. We can therefore assist you in applying for tax exemptions and advise you on all aspects of Dutch tax law.
Under Dutch law, a foreign employer is allowed to reimburse employees for any extraterritorial costs they incur while working in the Netherlands. This is, however, a very complicated administrative procedure that becomes even more complex as 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 costs remain the same for the employer. This is the very essence of 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 labour market. Finally, the 30% tax-free allowance cannot be separated from the employee’s existing gross income. Instead, the original income must be reduced to 70%, to which the 30% allowance is then added. Other, additional requirements for eligibility may also apply. If you would like to know more about the 30 percent tax ruling in the Netherlands or need help applying for tax exemption, WePayPeople’s Dutch Umbrella Company can assist you. We have all the necessary expertise and our professionals guarantee the best results in any situation.
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