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Expats and cross-border labor

Cross-border work constantly raises new exciting issues. The internationalization in business and speed of modern times make that the tax aspects of cross-border labor greatly increase.

In practice, one has to deal with the next fiscal questions.

  •  In which country you are insured?
  • What about the 30% ruling for expats?
  • Where you pay income tax?
  • Which treaties apply between different countries?

The following topics are particularly important for expats and cross-border labor.

30% ruling for expats

The 30% ruling is a Dutch tax facility aimed at attracting foreign workers with specific expertise to come and work in the Netherlands. The 30% ruling allows for a lump-sum tax-free reimbursement by the employer. This reimbursement is for extra cost of staying outsidethe country of origin (so-called extraterritorial costs).

Partial non-resident taxpayer status

If you come to live and work in the Netherlands, and you are eligible for the 30% ruling, then you can opt for a partial non-resident taxpayer status. For a partial non-resident taxpayer status, you are considered a part of the income tax as a non-resident taxpayer. In practice this means that there is a lower amount on which tax is levied. Therefore you pay less tax.

Qualifying non-resident taxpayer status

From the year 2015, the so-called rules for qualifying non-resident taxpayer status applies. You can’t opt for treatment as a resident taxpayer. You are a qualifying non-resident taxpayer if you meet the relevant conditions. The main requirement is that you pay for at least 90% of your total income tax in the Netherlands. Do you meet all the conditions of this scheme, you can get the same deductions and tax credits as a resident of the Netherlands. Should you not meet all the requirements, then you are a non-resident taxpayer Compensation schemes The tax treaties with Germany and Belgium include a compensation scheme. This may apply if you live in the Netherlands and work in Belgium or Germany. If the work country has the right to tax income from work, it can occur that you have to pay more tax than if you work in the Netherlands. To compensate this financial loss, in the tax treaty with Germany and Belgium has been set out a compensation scheme. Besides my specialist knowledge and experience in the field of tax issues around cross- border labor and expats, I have good contacts with foreign tax consultants in countries such as Germany and Belgium.