The Dutch State Secretary for Finance, recently announced that changes would be made to the ‘30% ruling regime’ for expatriate employees in the Netherlands, which is expected to come into effect in 2012.

Sunnyvale, CA -- (SBWire) -- 10/19/2011 --The Dutch State Secretary for Finance, recently announced that changes would be made to the ‘30% ruling regime’ for expatriate employees in the Netherlands, which is expected to come into effect in 2012.

Expatriate employees in Netherlands, working on a temporary basis can avail of “the 30% ruling regime”, resulting in a 30% tax free employment income in their hands. This provision was introduced by the Dutch Government to compensate them for specific expatriate costs.

The current conditions for application of the ruling are:

For a non-resident taxpayer hired abroad by an employer resident in the Netherlands:

1. The employer must be obliged to withhold wage tax;

2. The employee must possess specific expertise which is not easily available in the Dutch domestic labor market;

Duration

The duration of the 30% ruling regime is of 120 months, which commences from the date of employment in Netherlands.

Proposed Changes

Expertise - the employee needs to possess specific expertise, which has limited availability in the domestic labor market; will be deemed to be met if the employee earns a minimum salary;

Time Period - the period which is taken into account for a reduction of the duration of the 30%-ruling will be increased from 10 to 25 years;

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