Both the Dutch House of Representatives and Senate have now approved the Tax Plan 2019 which includes the transitional rules for expats with a 30% ruling issued in 2018 or earlier. Therefore this new legislation will become effective as of January 1st 2019.
In short: As of the year 2019 the maximum application period for the 30% ruling will become five years. The application period of the existing rulings under the new legislation will depend on their current end date.
If the end date of an existing ruling is in 2019 or 2020, this end date will remain unchanged, if it falls in 2021, 2022 or 2023, then the new end date will be 31 December 2020. All later end dates will be shortened by three years. For a full up to date explanation of the 30% ruling, an overview of the current conditions and our related services, please click here!
For more background on the changes per January 1st 2019, please scroll down:
On September 18th (2018) the official tax plans for 2019 have been offered to Dutch Parliament (“Tweede Kamer”). Cabinet has now filed their official legislation proposal to change the application term of the 30% ruling to a five year application period also for existing pre-2019 rulings. This despite the advisory board of State advising against the reduction of the application term for existing cases.
As expected further discussion was caused by the final proposal. With the Cabinet currently re-evaluating the announced abolishment of Dutch Dividend Withholding Tax (DDWT), already plans evolve as to where the budget on not abolishing the DDWT can be spend on.
Since the abolishment of the DDWT was originally aimed at keeping the business climate of the Netherlands interesting for foreign companies, it seems only logical that in case the DDWT is not abolished, to keep the funds available for the original goal: Investing in the Dutch business climate. Cabinet is currently discussing these subjects, possibly the reduction of the application term of the 30% ruling will be less strict. We expect to have more clarity soon.
Till the year 2012 the maximum application term was still 10 years, as of 2012 this was reduced till 8 years and as of 2019 the application term is shortened till 5 years. Scroll down for a link to the official document.
The filed legislation proposal does contain a transitional arrangement for international schooling fees, which can remain to be reimbursed for the full eight year period for existing rulings.
However still Dutch Parliament (as well as Dutch Senate) has to decide on the proposed legislation changes. Based upon the changes of the year 2012, in which prior application terms were retained, the applicable terms valid before the year 2019 will hopefully still be respected. However this would have to follow from a Political amendment, so let yourself be heard in The Hague!
Because of this proposed reduction of the 30% ruling term, you may wish to consider to try and receive your possible bonus and/or exercise stock options rights before the new proposed end date of your 30% ruling so the ruling may still be applied.
Please contact us for further information on the 30%-ruling. We advise and prepare requests for application of the 30% ruling and we are also specialised in complex cases which HR departments or even big four firms are not equipped to handle.
Please be sure to also read the following related articles which may well lead to a tax benefit:
- Be taxed on the actual interest instead the high deemed interest;
- Be sure to file a migration tax return over the year when entering and leaving The Netherlands;
- Possible tax refund when your taxable income fluctuates over a consecutive period of three years;
- Please be aware of filing deadlines and accrued interest in case of late filing of your income tax return.
The new 30%-ruling plans, the above mentioned comments & full evaluation document (in Dutch): inetsreactie_op_de_evaluatie_van_de_30%-regeling_voor_ingekomen_werknemers_(Kamerstuk_34785-83) kabinetsreactie-evaluatie-30-regeling