Reapplying for the 30% ruling in the Netherlands
The 30% ruling (also known as the 30% facility) is a beneficial tax regime for employees who have been hired from abroad to work for a Dutch employer (withholding agent). The main benefit is that 30% of the gross salary may be reimbursed free of tax. Eligibility for the 30% ruling, especially in situations where the 30% ruling has been granted during a prior employment, is subject to an assessment of the specific individual situation set off against the conditions to be met.
For example, there are situations in which an employee leaves the Netherlands and comes back a few years later. How does this work when an employee has been granted the 30% ruling in the past, left the Netherlands and wishes to make use of the 30% ruling again upon return to the Netherlands? Is this possible? We will explore the options in this article.
See also: The 30% Ruling in the Netherlands
Maximum duration & periods of previous stay
As of 2019, the maximum duration of the 30% ruling has been reduced from 8 years to 5 years. Periods of previous stay or employment in the Netherlands in the 25 years prior to the arrival in the Netherlands are deducted from the duration of the 30% ruling. An exception is made for the following periods:
- Periods of maximum 20 days per year in which the employee worked in the Netherlands;
- Periods of maximum of 6 weeks per year or one-time a maximum of three consecutive months in which the employee stayed in the Netherlands for holidays, family visits or other private reasons.
This means that in case the 30% ruling is (re)applied for, the duration is reduced by the time previously stayed and/or worked in the Netherlands. As such, when an employee already fully made use of the 30% ruling for 5 years or already spent 5 years in the Netherlands, it is not possible to (re)apply for the 30% ruling. This is because the reduction of the period for previous stay in the Netherlands would outweigh the maximum duration of the 30% ruling.
Returning to the Netherlands
As an example, the situation may occur where an employee has stopped working for the Dutch employer for which he had been granted the 30% ruling and moves to Belgium to work there for a Belgian employer. After one year the employee decides to move back to the Netherlands and starts working in the Netherlands for a Dutch employer again.
150 km from the Dutch border condition
One of the main conditions in order to be eligible to the 30% ruling is that the employee should have lived at a distance of more than 150 km from the Dutch border for at least 16 months during the 24 months before the start of the employment in the Netherlands. In the example illustrated above this requirement would not be met. The employee has lived within the 150 km of the Dutch border for more than 8 months.
However, an exception is made in Dutch tax law for these kind of situations. The 150 km criterion does not apply when an employee returns to the Netherlands after a previous employment in the Netherlands; and this previous employment did not start longer than 5 years before the date the employee starts working in the Netherlands again. As such, if an employee returns to the Netherlands within 5 years of the start of the previous employment, the 150 km requirement does not apply.
Reapplying
Therefore, in the situation illustrated above, the 30% ruling can be reapplied for if the maximum duration of the 30% ruling has not been used up yet. So if the employee was granted the 30% ruling for a maximum of 5 years, worked here for one year, then moved to Belgium and comes back after one year, in principle the 30% ruling can be reapplied for and may be granted for 4 years. Of course, assuming that the other conditions are met as well, such as the salary criterion. Important in this respect is that the employee was not considered a resident taxpayer of the Netherlands in the period he stayed in Belgium (or any other foreign country for that matter). In case the employee remained registered in a Dutch municipality during the year in between employments in the Netherlands or the individual was considered a resident of the Netherlands based on his personal situation, this may complicate matters and might result in not being able to reapply for the 30% ruling.
Should an employee return to the Netherlands for instance after 10 years, it should also be possible to reapply for the 30% ruling. However, in that case, the 150 km criterion should be met (as well as the other conditions of course). Hence should the employee return after living in Belgium for 10 years, the 30% ruling may not be reapplied for, as the 150 km requirement is not met. Also, the period(s) of previous stay in the Netherlands should not exceed the 5 year-period already. Otherwise, there is no period left for the 30% ruling.
Want to know more?
Should you have any questions about the 30% ruling, or should you wish assistance with (re)applying for the 30% ruling for one of your employees, please contact our Global Mobility Services team.
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