The Dutch 30 % -rule: change for Belgium

The Dutch second Chamber recently approved some important changes with respect to the conditions for the Dutch fiscal 30 %-rule. As a result, this rule will in practice no longer be available for Belgians.

The 30 %-rule is among other things applicable to employees of Belgian entities who work simultaneously in Belgium and the Netherlands or who are seconded to the Netherlands. In short, the rule is advantageous for such employees as 30 % of the Dutch salary is assumed to cover costs related to the employment in the Netherlands and this sum is therefore tax free.

In order to apply this favourable regulation, some conditions must be met and these have now been changed The duration of the 30 %-rule has been changed (from now on 8 years instead of 10 years); the salary threshold has been reduced to 50.000,00 EUR from 72.000,00 EUR and from now on each period of stay or employment in the Netherlands within a reference period of 25 years will reduce the duration of the 30 %-rule.

The most remarkable change concerns the new "kilometers-test" on which basis the 30 %-rule will be refused when the employee can't prove that, before his/her employment in the Netherlands he/she lived 150 kilometers away from the Netherlands and this during a period of minimum 16 months (needs to be calculated within the reference period of 24 months). These terms imply the end of the 30 %-rule for most of the Belgian employees.

The new regulation is applicable to all new requests filed as of 1 January 2012.

But the changes also concern existing beneficiaries For employees for whom the 30 %-rule is applicable for less than 5 years, the Dutch tax authorities can control in the fifth year to verify that the terms are still fulfilled. From that moment on the tax authorities can apply the new conditions, which means that also the 150 kilometers-test needs to be fulfilled.