Salary conditions for the Dutch 30% ruling in 2017
3 January 2017 - Do you employ foreign employees with specific expertise or skills? If they meet the salary requirement, you may pay them a tax-free remuneration for extraterritorial expenses. As of 1 January 2017, the salary criteria to qualify for the 30% ruling have been updated.
The employee hired from abroad incurs additional costs for his temporary stay in the Netherlands, for instance due to double housing or because he has to apply for a residence permit. You may opt for reimbursing the actually incurred expenses or you may apply the 30% ruling instead.
As of 1 January 2017, the following salary criteria apply to qualify for the 30% ruling:
- Employees with age 30 years and over: € 37,000 per year.
- Employees under the age of 30 with a master's degree: € 28,125 per year.
- No income requirement applies to employees who are academic researchers at certain institutions and to physicians in training.
Please note that the above mentioned amounts refer to taxable wages, the salary on which wage tax is calculated. Bonuses, holiday pay and salary in kind are also part of the taxable salary. In case your employee does not meet the salary requirement in a given tax year, he will lose the 30% ruling with retroactive effect. As his employer, you have to rectify this through payroll.
Does your employee turn 30 during the tax year? As of that moment, the higher salary condition will apply. This may lead to an adjustment of the height of the 30% allowance or that you cannot apply the ruling anymore. You should make proper agreements with your employee on this matter.
Other 30%-ruling requirements
The most important requirement in the 30% ruling is that the employee has specific expertise or skills that are scarce on the Dutch labour market. If the salary requirement is met, it is assumed that the employee has that specific expertise. Please note that the ruling is only available for employees who lived at least 150 kilometres from the Dutch border during more than 16 months of the 24 months prior to their first day of work in the Netherlands. This affects mostly Belgian tax residents but also residents from parts of Germany, France, Luxembourg and even Denmark and the United Kingdom. The 30%-ruling can be applied for with the Dutch tax administration. The application must be filed jointly by employer and employee.
If you would like to know more about the 30% ruling, the requirements and the obligations you must comply to, please contact Alexander Rasink by e-mail or by phone +31 (0)88 277 16 15. He will be happy to help you.
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