Friday October 27th, 2 amendments to the 2024 Dutch Tax Plan related to the 30% rule were adopted in the Dutch House of Representatives compared to the earlier Dutch Tax Plan 2024:
1. Adjustment of the net 30% allowance
The first amendment concerns the further limitation of the 30% rule benefit and provides that, as of 1 January 2024*, the tax-free allowance will be set at:
- Maximum 30% of the wage (including the net allowance) during the first 20 months;
- Maximum 20% of the wage (including the net allowance) during the second 20 months;
- Maximum 10% of the wage (including the net allowance) during the third 20 months.
*Lower limits: taking into account the minimum taxable wage of € 35,048 for employees younger than 30 years with a qualifying Master and € 46,107 for other employees.
Upper limits: taking into account the capping of the benefit up to a salary of maximum € 233,000.
After 60 months, the maximum duration of the 30% rule expires. In case of a decision with a shorter duration than 60 months, the same percentages and periods apply, with the right to apply the 30% rule until the moment the duration of the decision regarding the 30% rule has expired.
For employees for whom the 30% ruling is applied in the last wage tax period of 2023 a transitional rule applies. This transitional rule applies until 31 December 2028, provided the employee continuously meets the conditions of an incoming employee and there is no 'interruption'.
Employers may want to consider having employees to be employed in 2023 rather than after 2023 so that those employees can still benefit from the maximum period of the 30% allowance. Should employees change employers (transfer of the previous granted 30%-ruling to a new 30% ruling) after 2023, those old conditions (5 years of maximum 30% net allowance) will only apply until the day of the interruption. Friday, the Belastingdienst Buitenland Heerlen informed us that it is still not clear whether changing employers is always considered an interruption or whether it is only considered an interruption if the employment relationships 'do not connect' because, for example, there is a day in between.
2. Abolishment of the partial Dutch non-resident taxpayer status
The second adopted amendment decided to abolish the partial Dutch non-resident taxpayer status option as from 1 January 2025. A transitional arrangement has also been proposed for this. Employees for whom the 30% ruling is applied in the last wage tax period of 2023, can opt for the partial Dutch non-resident taxpayer status until no later than 31 December 2026. That is, if their 30% ruling is still applicable and there is no interruption, otherwise they can only opt up to the date of interruption.
We note that the above approved amendments as part of the Dutch Tax Plan and are still to be approved by the Dutch Senate. Consideration of the Tax Plan in the Dutch Senate is scheduled for Tuesday 12 December 2023. Once approved by the Dutch Senate, these amendments will be implemented as of 1 January 2024.
If you have any questions or comments, please do not hesitate to contact us.