Law text of the 30% ruling up to 2011

BULLETIN OF ACTS AND DECREES 640
Decree of 20 December 2000 for the Amendment of Several Implementation Decrees

Article II
The 1965 Implementation Decree for Wage Tax is amended as follows:

SECTION 3 FREE REMUNERATION AND PROVISIONS (SECTION IIA OF THE  LAW); EXTRATERRITORIAL EMPLOYEES

Article 8
1. In this section and the schemes based on it the following definitions apply:
2. These are the following:

  1. extraterritorial employees: employees who have entered or were transferred out of the country;
  2. entered employee: employee hired in another country by an employer or sent to an employer in the sense of Article 2 of the Act, with a specific expertise that is scarce or absent on the job market in the Netherlands;
  3. transferred employee: employee in the sense of Article 2 of the Act, transferred by an employer abroad with the intention of
    1. placement as official with a delegation of the Kingdom of the Netherlands abroad (post);
    2. employed as official, judicial officer or military personnel on the Dutch Antilles or Aruba;
    3. employed as military personnel outside the Kingdom of the Netherlands;
    4. employed in a region designated by ministerial order in accordance with Our Minister of Development Cooperation;
    5. the exercise of scholarly activities or the provision of education;

3. Cancelled.
4. Officials at a post are

  1. officials transferred by the Foreign Service of the Ministry of Foreign Affairs, being officials who are appointed to work anywhere in the world;
  2. officials of the Foreign Service who have not been transferred but who have been temporarily seconded to a post;
  3. officials of other ministries who are employed at a post;
  4. military personnel and civilian personnel of the Ministry of Defence who have been transferred to a post, as well as flag officers and general officers who are transferred on international staffs abroad;
  5. employees who on the basis of an employment contract under civil law work at a post after transfer from the Netherlands.

5. The exercise of scholarly activities or the provision of education is defined as
follows:

  1. the pursuit of research outside the Netherlands funded by
  2. a grant or scholarship from a Dutch organisation for scientific research or a foundation for the scientific research of the tropics;
  3. a NATO fellowship;
  4. comparable grants, scholarships and fellowships designated by Our Minister;
  5. being transferred abroad as teacher or scholarly practitioner by an educational or scientific institution or invited abroad by such an institution located abroad, with the purpose of providing education there at an educational or scientific institution or conducting scientific research for such an institution.

6. Tuition fees are payments for children of the extraterritorial employee to
participate in primary or secondary education at international schools and
international departments of noninternational schools, up to the amounts
charged by the school according to its rates for education, with the exception
of costs and accommodation expenses but including travelling expenses.

Article 9
1. Remuneration and provisions to extraterritorial employees to compensate or
prevent expenses outside the country of origin shall, with respect to
employees arriving at the joint request of the employee and the employer, in
any case be considered remuneration for extraterritorial expenses up to (proof
scheme):

  1. thirty percent of the basis, this being the sum of the wage received regularly associated with the stay outside the country of origin to the extent the entered or transferred employee has no right in this regard to prevent double taxation, and remuneration for extraterritorial expenses;
  2. the amount of the tuition fees.

2. In the case of provisions, the valuation schemes shall apply pursuant to Article
13 of the Act.

Article 9a

  1. For the evaluation of whether an entered employee possesses specific expertise that is scarce or absent on the job market in the Netherlands, account shall be taken of the interrelationship of the following factors, to the extent relevant:
    1. the level of education of the employee;
    2. the experience of the employee relevant to the position;
    3. the salary of the function concerned in the Netherlands in comparison to that in the country of origin of the employee.
  2. An employee of middle management or higher of an international concern with at least two and a half years experience in that concern who is sent in the framework of job circulation to the Netherlands, shall be considered to have specific expertise that is scarce or absent on the job market in the Netherlands.

Article 9b

  1. For entered employees the term of the proof scheme is a maximum of ten years, starting on the first day of employment by the employer.
  2. For transferred employees the term of the proof scheme is equal to the term of the transfer.

Article 9c

  1. Should an entered employee have another employer during the term, the proof scheme shall remain in force at the joint request of the employee and the new employer for the remainder of the term, providing the period between the end of employment by the former employer and the start of employment by the new employer is no longer than three months.
  2. For such a request the new employers shall demonstrate anew that the employee is to be designated as an entered employee.

Article 9d

  1. Should the entered employee no longer possess specific expertise that is scarce or absent on the job market in the Netherlands, the term shall be reduced to the time this situation arises but be no less than five years.
  2. Starting the sixth year of the term the tax inspector may require the employer to demonstrate that the employee must still be considered an entered employee.
  3. Should the employer demonstrate as from the sixth year of the term that the employee should at that time still be considered an entered employee, section two shall no longer apply for the remaining term.

Article 9e

  1. Should an entered employee have worked or stayed in the Netherlands prior to the start of employment, the term shall be reduced by the periods of prior employment and prior stay.
  2. Periods of prior employment and prior stay that terminated more than fifteen years before the term of employment shall not be taken into account.
  3. Periods of prior employment and prior stay that terminated by more than ten years but less than fifteen years prior to employment shall not be taken into account if the entered employee has not worked or stayed in the Netherlands for a period of ten years.
  4. For application of section three the entered employee will not have worked in the Netherlands if he worked in the country for a maximum of twenty days in every calendar year for the period of ten years.
  5. For application of section three the entered employee will not have stayed in the Netherlands if in every calendar year of the period of ten years he did not stay in the Netherlands for a total of six weeks for holiday, family visit or other personal circumstances, with a one-off period not being taken into account of at most three consecutive months in the Netherlands for holiday, family visit or other personal circumstances.

Article 9f
If a request by the employer for application of the proof scheme as stipulated in Article 9h is not made within four months after the start of employment of the entered employee, the term shall be reduced by the period between the time when the entered employee is employed by the employer and the time when the decree, stipulated in Article 9h applies for the first time.

Article 9g
In the event of reduction of term pursuant to this section, a period for which the term is reduced shall be rounded up to full calendar months.

Article 9h

  • A request for application or continued application of the proof scheme with respect to an entered employee shall be made to the tax inspector. He shall decide on the request for a decision that is eligible for objection.
  • Should the request be made within four months after the start of employment as an extraterritorial employee by the employer, the decision shall be retroactive to the start of employment as extraterritorial employee. If the request is made later, the decision shall apply starting the first day of the month following the month in which the request is made.