The Dutch government announced in April 2018 that the maximum term of the 30% ruling will be reduced from 8 years to 5 years. The change is now official and has been included in the 2019 Tax Plan, which was published on Budget Day 2018 (‘Prinsjesdag’ – 18 September 2018).
It is decided that the maximum term of the 30% ruling of 5 years will come into effect as of 1 January 2019 and will apply to all new and already granted 30% rulings.
There will not be a transitional law for already granted 30% rulings. This means that employees with a 30% ruling with a start date on or before 1 January 2014 will lose their entitlement as of 1 January 2019. However, costs for international primary and secondary education – school year 2018/2019 – can still be reimbursed tax-free after 1 January 2019 in case these costs will be reimbursed within the original duration of the granted 30% ruling.
It is advised to determine the remaining period as of 1 January 2019 for all employees currently using the 30% ruling facility, and start informing them about the reduced maximum term, because this may have a significant impact on their monthly salary as of 1 January 2019.
Please be aware that the partial non-resident tax status will consequently be reduced to 5 years. All other conditions of the 30% ruling will remain unchanged.