• posted by  in Netherlands forum 

    Hi Ingrid, I found this info:

    The 30 Percent Ruling is a personal income tax reduction for select employees in the Netherlands. It applies to specialized foreign employees who are brought to the Netherlands because their skills are scarce in the Dutch marketplace.

    The purpose of the 30 Percent Ruling is to compensate employees for the extra costs of their temporary stay in the Netherlands, e.g. to make Holland competetive in the international marketplace for skilled labour, since normal Dutch income tax rates are so high that it is not financially rewarding to work in Holland. However, there are consequences for possible future unemploiment aid, tax deduction for a morgatge and other aids.

    The 30 Percent Ruling allows an employer to pay an employee a tax-free allowance of up to 30 percent of the employee's total remuneration (the "Basis") for the first 10 years of their stay in the Netherlands. In addition, the employer may provide a tax-free reimbursement of the fees paid for the employee's children to attend an international school.

    A similar ruling also applies to compensate Dutch employees who are assigned to work in designated developing countries.

    Note that it typically takes two to three months from the application for the ruling to be granted. The excess tax paid in the meantime is repaid to the applicant once the ruling is granted.

    Regards
    Jan

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