Amendement 30%-ruling 2011

The State Secretary of the Ministry of Finance announced last week that later this year adjustments to the 30%-ruling will be made. Currently the 30%-ruling is applicable to employees who are:

(i) recruited from abroad and have;

(ii) specific knowledge;

(iii) that is difficult to find on the Dutch labour market.

If an employee has specific knowledge is now determined based on a combination of factors, including education, working experience, remuneration level, etc.  The 30%-ruling can be granted for a maximum period of 10 years, but a reduction is applied for previous periods of stay in the Netherlands.  In general the 30%-ruling could also apply to Dutch nationals who have been out of the Netherlands for a longer period of time (at least 10 years).In the view of the Ministry of Finance it appeared that in practice and due to case law over the past years the 30%-ruling is now being used more than desired. As a result the Ministry of Finance has announce the following measures in order to limit the use of the 30%-ruling:

• the condition of ‘specific knowledge’ will be replaced by an income criterion of approx. EUR 50,000 per year.

• the look back period in the reduction rule will be extended to 25 years, meaning that Dutch nationals will have to stay outside the Netherlands for at least 25 years in order to become eligible for the 30%-ruling upon return to the Netherlands. Currently this is often only 10 years (or 15 years in specific situations).

• the 30%-ruling will not be applicable to employees who are considered cross-border workers. As cross-border workers will be considered employees who are residing within 150 kilometers from the Dutch borders.

Not only limitations have been announce however: the Ministry of Finance also announced that the 30%-ruling will be open to PhD students, who will continue to work in the Netherlands after graduation. A lower income criterion will apply to this group of employees as well. Currently no information has been provided concerning the exact date of implementation of the new measures and possible transitional rules for employees who currently fulfill the conditions, but will not fulfill the new conditions. Of course we will be monitoring new developments. In case you would like to know how these new measures could affect your business, please do not hesitate to contact our partner Exterus B.V. or ourselves.