Tax

No transitional measures for shortening duration 30% ruling

The State secretary for Finance announced that he sees no reason for transitional measures with respect to the reduction of the maximum period of the 30% ruling from 8 to 5 years which we wrote about earlier in April. This means that employees with an existing 30% ruling that has surpassed 5 years, will lose the ruling as of January 1, 2019.

Laws can change, be prepared

Amongst others, the State secretary is apparently of the opinion that the measure was announced timely and that the use of the tax-free allowance (i.e. as a compensation for extra territorial costs) diminishes after the 5th year anyway. In his view, laws can change and it is up to parties to foresee in the possibility of changes when concluding long-term agreements.

"The announcement is an inexplicable step and is certain to further undermine the public's faith in the current lawmaking process", says Brian James, Global mobility advisor of Grant Thornton. "If the Government persist, this will inevitably lead to an increase in the administrative and legal burden for employers, employees, the courts and the Government itself".

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