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Under certain conditions employers can equate the withheld wage taxes with the income tax rates in the payroll accounting. For example, if net wages are agreed with a foreign employee, the employers may use this method to settle the correct amount quickly and definitively with an additional wage run. The main advantage is that employees do not have to file their own tax returns.
This simplified method applies to:
If such an employee lives in the Netherlands and makes use of the 30% scheme, they may opt for the so-called partial non-resident tax liability. In such a case the employee will be treated as a non-resident for the levying of income tax in box 2 and 3. As a result, taxation in the Netherlands may often be limited to the wage paid.
To apply this simplified method, arrangements need to be made with the Tax and Customs Administration. The tax inspector’s approval must be laid down in a withholding taxes agreement. WePayPeople may assist in obtaining this approval and assist with the correct processing in the payroll accounting.
To obtain approval the following conditions must be fulfilled in any case:
Would you like to know more aboute the above mentioned information? Contact our Expat Payroll Desk on +3120 820 1560 and we or our Tax partner can assist you.
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