A major Dutch tax planning opportunity is available for employees recruited from abroad (or temporarily assigned to The Netherlands). This planning opportunity is known as the 30% ruling.
This ruling is a forfeit reimbursement of extraterritorial costs without the need of additional evidence. However, when granted, the extraterritorial expenses cannot be reimbursed anymore free from tax.
When granted, other advantages are:
- Easy exchange foreign drivers’ license into a Dutch one for the employee as well as his family members;
- Choice for partial foreign resident taxation;
- Possibility of free reimbursement of costs for recognized international schools
The down side is that the gross salary will be reduced with a maximum of 30% and, consequently, the base for gross salary related benefits, like social security, pension accrual etc. will be reduced accordingly.
EMG has a special arrangement with the Dutch tax authorities, of which the most important advantages are:
- EMG is authorized to assess the applications on behalf of the tax authorities.
- Although a formal granting letter of the tax authorities is still required, it will take usually only about 1 to 2 weeks after filing the application to receive this letter, where the normal processing time can take up to 13 weeks.
Want to know more about the unique advantages of partnering with EMG? Contact us or let us contact you!
Global HR & Mobility Market Updates
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30% Ruling – Salary Criteria in 2021
The employee’s annual taxable salary must be more than € 38,961. To compare in 2020 it was € 38,347.
The 2021 salary thresholds for Highly Skilled Migrants (HSM)
The 2021 salary thresholds for Highly Skilled Migrants (HSM), recent graduates and Blue Card holders in the Netherlands have been announced.
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Nino Nelissen – Founder of EMG