Friday, 18 November 2011

Parliament backs changes to 30% ruling, set salary and time limits

MPs have voted in favour of changes to the 30% tax ruling for expats, bringing in a minimum salary and cutting the duration to eight years.

However, the new regulations are less severe than originally planned. Expats must now earn a basic salary of €50,000 (including the tax break) to qualify, rather than the €70,000 originally planned.

In addition, there will be no salary minimum for academic staff and researchers, and a new category of ‘young masters’ will be created for the under-30s who earn at least €38,000 (including the tax break).

No change for most

Ton Krol, of tax consultancy Blue Clue Tax says young people at the start of their career and those on a job rotation system within multinationals will be worst affected.

‘This will make it more difficult to attract new staff because talented people who are willing to move can work everywhere. Why work in the Netherlands if your net income can be twice as much somewhere else?’ he said.

In order to pay for the shortfall in expected tax income, the government has cut the duration of the tax break from 10 to eight years.


However, no changes have been made to the proposed 150 km requirement – which means expats must have lived at least 150 km from the Dutch border to qualify.

‘This means residents of Belgium who are working in the Netherlands will be severely hit,’ says Arjan Enneman, managing director of tax specialists Expatax.

‘The same applies to Germans who live close to the border. You have to ask if this will stand up in court, even though the minister says this is allowed under EU regulations,' he said. 'But what about the expat who temporarily worked in Belgium before he is seconded to the Netherlands?’

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