Recent developments for expats and cross-border workers
Ton Hendriks |
There have been some interesting updates for cross-border workers. This concerns the abolishment of the partial non-resident tax liability for persons with the 30%-ruling and the extension of the social security transition period until July 1st, 2023.
The House of Representatives wants to abolish partial non-resident tax liability for persons with the 30%-ruling
A motion has been passed in the House of Representatives requesting the government to abolish partial foreign tax liability for employees who make use of the 30% ruling. The House finds it difficult to explain that the 30% ruling is maximized to the WNT standard, but that foreign capital income remains fully exempt from taxation. If an employee qualifies for the 30% ruling, he can opt for partial non-resident taxpayer status. This means that, despite the fact that he lives in the Netherlands, he is exempt from foreign income in box 2 and box 3 in the Netherlands. If the government complies with the motion the tax burden of wealthy residents with the 30%-ruling can increase drastically. For US nationals and persons with a US green card their residency position for the purpose of the Dutch-US tax treaty will also be affected because s a Dutch resident who applies the partial non-resident status is deemed to be a US tax resident for tax treaty purposes. With normal taxation in box 2 and 3 he will become a Dutch resident for tax treaty purposes. This leads to a shift of taxation rights from the US to the Netherlands.
Extension of social security transition period until July 1st, 2023
It has been agreed in an EU context that until 1 January 2023 working from home will have no consequences for the social security of cross-border workers. It has been proposed to extend this period to 1 July 2023. This extension is necessary to arrive at structural solutions. This extension has now been accepted by the other Member States. Working from home will therefore have no consequences for the social security of employees for the time being. Source: Dutch Minister of Social Affairs and Employment, report committee debate 3 November 2022 / Belgian National Social Security Office, news item 17 November 2022.
Source: Dutch Minister of Social Affairs and Employment, report committee debate 3 November 2022 / Belgian National Social Security Office, news item 17 November 2022.
