Tax tips for expat families

29th July 2003, Comments 0 comments

Spreading your salary across the needs of your family is not always easy, but the 30 percent ruling, family allowance and assistance with childcare costs can help. Taxation advisor Vincent van Oostveen explains.

For eligible expats, knowing the ins and outs of the 30 percent ruling is key to tax planning. However, families should note that there have been several clarifications to the 30 percent since November 2001, the most important of which are outlined below:

  • The 30 percent ruling may be calculated on the basis of the income from present employment, including bonus payments and other single rewards. This approval has retroactive effect up to 1 January 2001.
  • The application for the partial, non-domestic taxpayers' option can be made at the time of filing the income tax return, instead of at the end of the calendar year.
  • The 30 percent ruling may be applied before the official decree has been issued, under certain circumstances.
  • The state secretary has provided a suggestion for the wording of the employment contract in order to ensure that the 30 percent ruling is applicable to the whole remuneration package.
  • The employer can pay an allowance for double costs of housing. This allowance does not fall under the scope of the 30 percent ruling, but the allowance can be tax exempt, provided it can be proven the extra costs amount to more than 30 percent.
  • It is still possible for the employer to reimburse the costs of an international school for an employee's children.

Nursery and child care

The costs for nursery or daycare can be partially reimbursed by the employer tax free, provided that the employee pays part of the costs.

If the employee does not contribute to the costs of nursery or daycare, part of the allowance paid by the employer will then be taxed as salary.

In addition, the employer providing the allowance receives a discount on the wage tax that is payable to the Dutch tax authorities.

rcent ruling may be calculated on the basis of the income from present employment, including bonus payments and other single rewards. This approval has retroactive effect up to 1 January 2001.

  • The application for the partial, non-domestic taxpayers' option can be made at the time of filing the income tax return, instead of at the end of the calendar year.
  • The 30 percent ruling may be applied before the official decree has been issued, under certain circumstances.
  • The state secretary has provided a suggestion for the wording of the employment contract in order to ensure that the 30 percent ruling is applicable to the whole remuneration package.
  • The employer can pay an allowance for double costs of housing. This allowance does not fall under the scope of the 30 percent ruling, but the allowance can be tax exempt, provided it can be proven the extra costs amount to more than 30 percent.
  • It is still possible for the employer to reimburse the costs of an international school for an employee's children.
  • Nursery and child care

    The costs for nursery or daycare can be partially reimbursed by the employer tax free, provided that the employee pays part of the costs.

    If the employee does not contribute to the costs of nursery or daycare, part of the allowance paid by the employer will then be taxed as salary.

    In addition, the employer providing the allowance receives a discount on the wage tax that is payable to the Dutch tax authorities.

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