Cuts to the 30% ruling postponed

Dutch government has decided to postpone the cuts to the 30% reimbursement ruling (better known as the 30% ruling) for two years. This means that those employees receiving the tax benefit and who would have lost it in 2019, will continue to receive it until 2021, when the duration of the benefit will be cut from eight to five years.

The 30% ruling is a Dutch tax exemption for employees who were hired abroad to work in the Netherlands. If a number of conditions are met, the employer is allowed to pay you 30% of the employee’s salary as a tax-free allowance. The tax-free allowance is considered a compensation for the expenses that the employee has by working outside his or her home country.

The news of delaying the shortening of the 30% ruling comes after the decision not to scrap dividend tax and thus redistribute the money that this measure saves to improve the business climate.

More details to follow shortly.

Dennis Veldhuizen (dv@clintlegal.com / +31 20 820 0330)