The Dutch government has curtailed the maximum term of the 30% ruling from 8 years to 5 years. This change will come into effect as of 1 January 2019 and will apply to all new and already granted 30% rulings. The government has not developed 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 the start of 2019.
For this group of employees, it might be beneficial to pay out bonuses within the validity of the 30% ruling. In case it is possible to pay out bonuses before 1 January 2019, this can be processed in the payroll with effect of the 30% ruling.
The payment of bonuses may have tax consequences for the employee. With the 30% ruling the employee has the partial non-resident tax status which means that the employee is tax-exempted on savings. In case the employee has used the 30% ruling on 1 January 2019 already for 5 years or more, the employee will lose their entitlement and also the non-resident tax status. As a consequence, the employee will be taxable on his/her worldwide income and savings. Please be aware that the payment of bonuses increase the savings of the employee and that these savings will be taxable in the income tax return 2019.
Please be aware that, any taxpayers who are also taxable in another country, such as US nationals, should check with their tax providers to ensure that this is effective overall.