30% ruling voor foreign employees and their pension

The 30% ruling is meant to attract foreign employees with specific skills or expertise that are scarce on the Dutch labor market to the Netherlands. This means that employees either need to be recruited while outside the Netherlands or assigned to the Netherlands. The Dutch employer should be able to demonstrate that there was no candidate on the Dutch labor marker for that position. Secondly, when the employees are recruited or assigned, they must have specific skills or expertise that is scarce on the Dutch market place. The determination whether the employee has specific skills or expertise that are scarce is determined on a case by case situation by the Dutch tax authorities. For this they will look at 3 factors:1) Relevant work experience
2) education level
3) salary levelThe request for the 30% ruling is filed with the Dutch tax authorities by (or on behalf of) both the Dutch employer and the employee. With the request, the employee must prove the level of his skills / expertise by providing a copy of his curriculum vitae listing education level and previous work experience. In addition a copy of the employment agreement (or assignment letter) must be provided. The Dutch employer must provide a statement detailing the specific expertise of the employee in relation to the position. In addition, the employer can also provide information on the period the position was vacant and on the number previous applicants to prove scarcity on the Dutch labor market.

In addition to proving skills / expertise and scarcity, the Dutch tax authorities will also need a copy of the employee’s passport, a copy of the work permit (if applicable), the SoFi-number (or Burgerservicenummer) of the employee, address details, periods of previous stay in the Netherlands, company details and the company wage tax number.

The 30% ruling is granted for a maximum period of 120 months. However, periods of previous stay or work in the Netherlands are deducted from the 120-month period. The rules to calculate these deductions are very complicated. For example, if you spent short periods of time in the Netherlands in the preceding 10 years, these periods will be deducted from the maximum 120 months and the look-back period is limited to that preceding 10-year period. However, if you had substantial periods of stay in the Netherlands then the look-back period may be extended to the preceding 15 years or even longer. For this purpose, substantial periods of stay in the Netherlands are

• spending more than 20 workdays in The Netherlands in one of the 10 calendar years prior to applying for the 30% ruling
• spending more than 6 weeks in total in The Netherlands in one of the 10 calendar years prior to applying for the 30% ruling

In addition, the Dutch tax authorities do allow a one off period of 3 consecutive months in the Netherlands during the 10 years prior to applying for the 30% ruling.

So, if you previously “substantially�? lived, worked or just stayed in the Netherlands and left less than 10 years ago, the Dutch tax authorities will extend the reference period which may sometimes have the result that the 10 year period is reduced to 0 years.

This ruling has certain consequences in terms of pension and social security:
employees who take advantage of the 30% rule can only accumulate pension on the remaining part of their salary.

When you leave the Netherlands to carry on your career in another country, your pension offers several possibilities. If your pension is small, you may opt for a lump sum payment.