Dutch Tax Tips: Starting a business with the 30% ruling

Whether as a foreign company or a private individual, you may be toying with the idea of starting a business in the Netherlands. This is the last in a series of three articles discussing the possibilities open to you.

The first article covered the tax considerations of starting a business in the Netherlands, while the second article concerned tax considerations for contractors and freelancers.

This third and final article will discuss how to start a business in the Netherlands with the 30 per cent ruling.

Starting a business & the 30% ruling

If you are currently working for an employer under the 30 per cent ruling, it is possible to continue to make use of the ruling if you wish to start your own business in the Netherlands.

In principle there are two possible options:

› Working through a payroll company. In this case, the payroll company is the employer and they will process the 30 per cent ruling through the payroll administration.

› Setting up a BV (company) and becoming an employee of it.

In general, the requirements of the 30 per cent ruling (see below) still apply if you start up a company yourself or you plan to use a payroll company.

You must re-apply within three months after you leave your previous employer and you must have an employment contract with your new employer (payroll company or your own BV).

Please note that if you wish to set up your own Dutch BV, other Dutch tax obligations may be applicable. See the previous articles on this subject.

Requirements for the 30% ruling

To be entitled to the 30 per cent ruling, all of the following conditions have to be met:

› You work for an employer who withholds Dutch payroll tax from your salary.

› You have agreed in writing with your employer that the 30 per cent ruling is applicable.

› You have been transferred from abroad to a Dutch employer or you have been recruited from abroad by a Dutch employer.

› You did not reside within 150 kilometres of the Dutch border for the last 18 out of 24 months at the time of hiring.

› Your taxable salary is at least 35.770 euros per year (excluding the 30 per cent ruling).

› You have specific expertise that is scarce in the Netherlands.

Specific expertise requirements

For the specific expertise requirement (i.e. expertise that is scarce or absent in the Dutch labour market), a minimum salary requirement was introduced with effect from 2012.

The salary requirement (at least 35.770 euros per year in 2013 excluding the 30 per cent ruling) replaced the obligation to prove the level of education and relevant work experience.

However, this information may still be relevant if the scarcity needs to be proven. In specific industries almost every employee fulfils the minimum salary requirements, for example professional football players.

Final note

If you are working for an employer under the 30 per cent ruling, you can continue to make use of the 30 per cent ruling if you start your own business in the Netherlands.

Since your options depend on your particular situation, it is always advisable to to consult a trustworthy tax advisor to save time and money.
 

Nico Koppel is an Expat Service Provider, who specialises in tax advice & accountancy. For more information, please comment below or visit Koppel Tax Consultants.