Dutch Tax Blog

Dutch Tax Blog

30% ruling ends, now what?

30 ruling in The NetherlandsPosted by Mike de Gruijl Sat, August 13, 2016 15:19:29

What happens when I loose the 30% ruling?

This is a question my clients ask me frequently. Basically the answer is quit simple;

You will have to pay more taxes and will be treated like an ordinary Dutch resident when it comes to paying taxes in The Netherlands.

Of course this is a very general answer. To give a more specific answer lets explain what the 30% ruling benefits are compared to regular Dutch tax payers.

People who have the 30% ruing are usually aware of the fact that they pay less income taxes over their salary. So for example if you earn € 100.000,- a year you will only pay income taxes over € 70.000,-. This gives you a benefit of 52% over € 30.000,-.

But what not all people know is that they also have the right to apply for a so called partial foreign tax payer arrangement. If you do apply for this, all your assets are free of taxes in The Netherlands. So this can give you a benefit of 1.2% over your assets. But be aware this doesn't mean you don't have to pay taxes at all over your assets. If your assets are located in a foreign country this can mean that you will have to pay taxes in that country. Therefore it is always smart to check where you will get the best tax rates.

The other tax benefit you have while you receive the 30% ruling is not paying taxes out of income you receive income out of substantial interest as a shareholder. This is a benefit of 25% over this income

So now we know what are benefits are while having the 30% ruling.

This makes it easier to answer your question what benefits you will loose namely, every benefit!

But there are 2 things which can make a difference and that is when you have your assets located in a different country it is likely you will pay taxes in that particular country and not in The Netherlands. So again it is a smart thing to look at the tax wages of the country and compare them with the Dutch before transferring money to a different location.

The other thing which is worth to mention is that in some cases you will receive more tax deduction on your mortgage interest. Because of the 30% ruling it happens quit often that people pay a maximum of 42% taxes instead of the 52% taxes. If you loose the 30% ruling your income can fiscally increase and causes that you will pay 52% taxes on a part of your salary and therefore have a higher tax deduction on the mortgage interest payments.

If you want to learn more about your particular situation please contact us and we are happy to calculate the effects for you.

More information on tax services in The Netherlands can be found at www.tssolutions.nl

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National audit office questions 30% ruling, calls for proper research

30 ruling in The NetherlandsPosted by Mike de Gruijl Fri, August 05, 2016 21:56:44
Found on Dutchnews.nl

The tax break payable to some expats has been called into question by the Dutch government’s audit office, which says the 30% ruling has never been properly evaluated. Claims that the ruling encourages highly-skilled foreigners to settle in the Netherlands and boosts the country’s attractiveness as a place to do business have never been properly researched, the audit office said in a new report.

Nor has the potential negative effect of encouraging highly skilled foreigners to settle in the Netherlands on the Dutch workforce been properly looked at, the report, published earlier this month, said.

The audit office says some 52,000 people were taking advantage of the tax break in 2014 and the number of claims has been rising steadily. This, it says, comes despite government efforts to reduce the cost.

In 2012, the tax break was restricted to foreign workers who lived at least 150km from a Dutch border prior to moving to the Netherlands, and stricter salary requirements were introduced. At the time the government said the changes would generate an extra €78m for the treasury by 2020. In the meantime, the bill is €100m higher than it was, the audit office said.

The audit office also criticised the minimum salary requirement – €38,889 – used by the tax office, saying it has no proper basis.


The audit office went on to call on the government to carry out proper research into the impact of the 30% ruling, and to make sure that parliament is informed about its costs on an annual basis.

Junior finance minister Eric Wiebes has already rejected most of the recommendations, saying there is sufficient evidence that the ruling helps encourage highly-skilled foreigners to locate to the Netherlands. But he did agree to report on the cost of the ruling in the annual spending review.

Expat employers quoted by the NRC say the cost of living for highly-educated expats can be extreme.
No choice
‘They often have no choice but to live in a very expensive rental home and children who are in English-language education have to go to more expensive international schools,’ Sander Hofman, a spokesman for semi-conductor company ASML told the paper.

Some 248 of the company’s Dutch workforce of 8,500 benefit from the 30% tax break, he said.

In total, the ruling cost the treasury nearly €700m in 2014, according to the audit office report. Of that, around 25% is due to people earning more than €200,000 a year.

Competition Bert-Jan Woertman, head of communications at Eindhoven’s high tech campus, said bringing in expats is not affecting the employment chances of Dutch workers. ‘You are competing with abroad, Silicon Valley and Singapore,’ he said. ‘The Netherlands is not educating enough people for all the jobs. The universities of technology are growing but in Aachen, for example, there are more tech students than in all three of ours.’

The NRC says a majority in parliament, including members of the ruling PvdA, support further reform of the 30% ruling.

More information about the 30% ruling? www.tssolutions.nl

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After 2 years still got it

30 ruling in The NetherlandsPosted by Mike de Gruijl Mon, August 01, 2016 15:12:43
Netherlands, August 1, 2016

6 weeks ago I was contacted by a client who already lived and worked in The Netherlands for 28 months but never applied for the 30% ruling when he arrived to The Netherlands
Because all his colleagues and friends told him that the maximum period in which you can apply for the 30% ruling already had expired he was in the presumption that applying for this ruling had no use anymore.

We were happy to help him out with his taxes and therefore could inform him that today we received the positive news that as of today he will be able to have all the benefits of the 30% ruling.

If you are in a situation that you are not sure of the fact that your 30% ruling will be granted by the Dutch tax authorities. Just contact Tax & Services Solutions and we will make a free tax scan to see what your possibilities are. You will be surprised!

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