Dutch tax and social security Update for internationally mobile employees including 30%-ruling

Transcription

1 8 February 2018 Dutch tax and social security Update for internationally mobile employees including 30%-ruling Kees de Graaf Expatriate tax services and emploment tax services Robin Schalekamp Expatriate tax services and employment tax services

2 Agenda 1. Tax residency in the Netherlands 2. Basic numbers %-ruling 4. No taxation in the Netherlands? No taxation in the Netherlands

3 Part 1 Tax residency in the Netherlands

4 Tax residency in the Netherlands When do you qualify as a tax resident? We do not count days. Tax residency depends on the facts and circumstances. Two countries? Tiebreaker in the tax treaty.

5 Facts and cicrumstances tax residency in the Netherlands Nationality. Duration and regularity of stay. Residence partner and kids. Residence other family. Availability of permanent dwelling. Employment. Civil registration. Financial and economic ties (for instance memberships, season tickets). Sources of income. Social binding. Your personal wish. Place where the kids go to school. Place where you have a registered (private) vehicle at your disposal.

6 Taxes on income Resident individuals are subject to income tax on their worldwide income: o Foreign income is subject to the same income tax rates as domestic income. o For employment income of individuals who remain residents while exercising employment abroad, a tax exemption or a tax credit could apply.

7 Taxes on income Non-residents are subject to tax (same tax rates as residents) in the Netherlands with respect to certain categories of income originating from sources in the Netherlands: o Box 1: taxation of income from employment in the Netherlands and profits from a business conducted through a permanent establishment or representative. o Box 2: income and capital gains on substantial shareholdings in a NL-company. o Box 3: the tax on income from savings and investments is levied on immovable property situated in the Netherlands.

8 Part 2 Basic numbers 2018

9 Wage / income taxes (excluding premiums for the national insurances) Bracket From To Rate Maximum 1-20, % 1, ,143 33, % 1, ,995 68, % 14, , % Pagina 9

10 Wage / income taxes (including premiums for the national insurances) Bracket From To Rate Maximum 1-20, % 7, ,143 33, % 5, ,995 68, % 14, , % Pagina 10

11 30%-ruling 11

12 30%-ruling 30% of the taxable salary could be paid as a tax free allowance in order to cover cost for working outside the home country (ET costs) An employee who has specific knowledge that is scarcely available on the Dutch labour market

13 30%-ruling Example Gross income: EUR Pension premiums: EUR /- Taxable salary: EUR Dutch tax and social security on EUR = EUR (after rebates) Net payment = EUR 51,555 30%-ruling: EUR tax free Dutch tax and social security on EUR = EUR 24,404 (after rebates) Net payment = EUR

14 Conditions 30%-ruling To qualify for the application of the 30%-ruling, the expat should meet the following criteria: 1. The expat should be hired from abroad or seconded to a domestic employer in the Netherlands; 2. The expat must be living at least 150 kilometers away from the Dutch borders during two-third of a 24 month period before the start of the activities in the Netherlands (For doctoral students and expats who worked in the Netherlands before special rules apply). 3. The expat must be paid through a Dutch payroll, i.e. the salary of the expat must be subject to Dutch wage tax withholding. 4. The expat should have specific expertise that is not or scarcely available on the Dutch labour market.

15 How long is the 30%-ruling applicable? The ruling is granted for a maximum period of 96 months (eight years) This period is reduced by any previous period(s) of employment in the Netherlands, or by any time previously spent in the Netherlands The application should be filed with the DTA. BDO has made a special ruling with the DTA. With this ruling BDO is allowed to check whether an expat fulfils the conditions

16 30%-ruling various Request must be made within 4 months, for a backdated application Parttime is not recalculated to fulltime basis In case of split payroll all income may be taken into account No maximum Applicable on all kind of income 30%-ruling or tax-free compensation for actual extra-territorial costs

17 Extra-territorial costs Extra-territorial expenses are expenses than an employee would not have incurred if he had remained working in his home country. Extra-territorial costs according to the Dutch Tax Authorities: o Cost Of Living Allowance ( COLA ). o Househunting/acquintance trip to the host country with or without family. o Costs of converting or requesting personal documents and visa, such as drivers license and residency permits (i.e. not work permits). o Costs for medical examinations and vaccinations. o Double housing costs in case the employee remains living in the home country, such as hotel costs. o Home leave to the home country. o Tax advice. o Costs for the request of the A1-declaration or Certificate of Coverage.

18 Tax status with 30%-ruling If an expat lives and works in the Netherlands, he/she has the status of a resident taxpayer. Choice to be treated as a partial non-resident taxpayer. Partial-resident: considered a resident taxpayer for box 1. However, for box 2 en box 3 the expat will be considered a non-resident taxpayer. Pagina 18

19 Attention points 30%-ruling 2019? Duration 5 years No transitional legislation Annual check Dutch Tax Authorities: If salary criterion has not been met, the 30%-ruling can be withdrawn for the past and for the future. Social security: A person who is granted the 30%-ruling and who is subject to the Dutch social security system, will pay Dutch social security premiums based on 70% of the gross salary. Pagina 19

20 No tax in the Netherlands? 20

21 60-days rule Employees assigned to the Netherlands within an international group are exempt from personal income tax on their employment income if: o The employee works in the Netherlands for no more than 60 days in a twelve-month period. o The employee is assigned because of an exchange program, career development program or his/her specific expertise

22 Working less than 10% in the Netherlands Based on national legislation, the Netherlands do not make use of the right to tax the income in case: Non-residents. Work 10% or less in the Netherlands And the income is taken into account in the home-country Based on a treaty And there is no exemption in the home country

23 Questions? Thank you for your attention!