Breedte test

30% tax ruling

Many of our clients are eligible for the 30% tax ruling. However, there are usually some unanswered questions which I will try to address below:

If the 30% ruling is fully applicable, the gross salary of the employee will be reduced by 30%. In return, the employee should receive this 30% reduction as a tax free reimbursement for extra expenses incurred during the employee’s move to the Netherlands.

This is the most common way it is applied as it does not influence the salary burden for the employer. However, the employer is not obliged to pass on the advantage of the ruling to the employee. In practice, the employer can partially or wholly take the benefit.

The fact that the gross salary is reduced by 30% may have implications in case of requiring unemployment or disability benefits, since these benefits are based on taxable salary. Therefore the tax authorities require that both employer and employee are aware of these consequences. This acknowledgement in writing can be done by means of a clause in the employment contract or as an addendum to the employment contract.

In 2015, the annual taxable salary for an employee must be more than €36,705 (however, a lower salary of €27,901 is applicable for those who have completed a Master’s degree and are younger than 30 years old). Furthermore, for scientific researchers, employees working in scientific education, or doctors in training, no minimum salary is required. Please note that there are restrictions regarding the companies or institutions for which this group of employees can work. If you receive a salary that is below the annual requirement for the ruling, you may still receive a tax benefit but it will be less than 30%.

Settle Service holds a covenant with the Dutch tax authorities that enables us to take a decision after the receipt of all required documents. The advantage for you is that the ruling can be implemented right after our decision, instead of waiting a minimum 4 weeks before the tax authorities reach their decision. The tax authorities perform random spot checks on our decisions annually.