2022-05-25-KPMG_Global-Netherlands_–_New_Proposals_for_30_Ruling_Could_Have_Significant_Impact_3页_325kb

Dutch Tax Proposal: Changes to 30% Ruling

Key Details

• The Dutch Ministry of Finance has proposed changes to the "30% ruling," effective from 2024.
• The new proposal limits the 30% ruling to employment income up to a maximum amount based on the WNT norm (€216,000 in 2022, subject to annual indexation).
• This change will increase the top income tax rate for high earners: from 34.65% to 49.5% on income exceeding the WNT norm.

Impact on Taxpayers

• High-income earners will face higher Dutch income tax liabilities.
• Specific payments such as bonuses or equity-based compensation may result in increased taxes if they push income above the cap.
• Employers with tax-equalisation policies might incur higher costs for assignments.

Background

• The 30% ruling is a tax concession for eligible expatriates, allowing tax exemption on 30% of gross employment income, thus reducing effective income tax rates by 30%.

Status

• The proposal is part of the Dutch Government's 2023 budget measures and requires approval by the Dutch Parliament; no final details or grandfather rules have been specified yet.