Main changes to the 30%-ruling as of January 1, 2012

I. The condition of specific expertise which until now was determined interdependently by the level of work experience, education level and the salary level, will from now on be solely based on a minimum salary level of Eur 35.000 (excluding the maximum 30% cost allowance). Please note that apart from the minimum salary level to determine the specific expertise of an employee, the scarcity on the Dutch labour market also needs to be tested.

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Employees with the 30%-ruling

For those employees who have been granted the 30%-ruling prior to 1 January 2012, these proposed changes might still be relevant. The tax inspector is authorized to re-evaluate the eligibility for the 30%-ruling, starting 5 years after the employment in the Netherlands.

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30%-ruling and the 150 km condition – Update

As of 2012 expats who lived in the foreign border region (within a radius of 150 kilometre from the Dutch border) for more than 16 months in the 2 years prior to their employment in the Netherlands are no longer be eligible for the 30%-ruling. Since then, there have been several court cases contesting the 150km condition as it may possibly be in conflict with EU law.

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Proposed reduction maximum term 30%-ruling

The Ministry of Finance recently evaluated the 30%-ruling for expatriate employees. The Ministry of Finance concluded that the actual extraterritorial costs usually amount to approximately 20% instead of 30% of their taxable income. One of the recommendations from the government coalition agreement is to reduce the maximum period the 30% ruling can be applied. Pursuant to the announcements of the new Cabinet, the aim is to reduce the maximum period of validity from 8 to 5 years as from 2019. Currently, it is not clear if 30%-rulings granted before 2019 will be grandfathered.

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