Dutch Government has announced its intention to limit tax relief on the 30%-ruling.

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Under the 30% ruling an employer can provide a tax-free allowance to qualifying employees recruited or seconded from abroad to cover expatriate expenses.  The maximum tax-exempt allowance is set at 30% of the employee’s income that is subject to Dutch tax. 

The Dutch Government intends to introduce a maximum calculation base for the 30% tax free allowance as from 2024,which will be based on the maximum remuneration for public officers and officials (in 2022, this was set at EUR 216,000 p.a).  The announcement also details a transition period of three years for employees who already benefit from the ruling.

It is anticipated that a bill to this effect shall be submitted to Parliament on Budget Day (Prinsjesdag) in September 2022.

If this plan is implemented, then employers may consider accelerating anticipated recruitments/secondments from abroad, in order to benefit from the transitional rules (provided the employees“s remuneration is well above the intended cap).

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This article was produced by Karin Chung, Tax Adviser at Loyens & Loeff, the Netherlands, a CELIA Alliance member firm.

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