30% facility: when there is an "interruption" in employment

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EY Netherlands

28 Feb 2024
Subject Tax updates
Categories Tax

A new Expert Group opinion has been published on the transition arrangements for the 30% facility which looks at when an "interruption" in employment occurs. It is relevant to know this because after a break (or interruption) there is no longer any eligibility for the transition arrangements related to the changes to the 30% facility.

The transition arrangements apply to the following changes:

  • Capping of the 30% facility at the "Balkenendenorm" salary standard: the transition arrangements provide for the salary ceiling to be delayed, such that this takes effect from 2026 (instead of 2024)
  • Curtailment of the 30% facility to a 30/20/10% facility: the transition arrangements provide for a continuation of the full 30% facility for the duration of the issued decision 
  • Abolition of partial foreign tax liability: the transition arrangements provide for this abolition to be postponed until 2027 (instead of 2025)

It is clear from the Expert Group opinion that there is no break if the "change of employer" rules can be applied. This means that if an employee moves to another employer during the period of the 30% facility they can, on request, continue to apply the 30% facility with the new employer provided that the period between the end of the employment with the old employer and the conclusion of the employment contract with the new employer is no more than three months. The employee can therefore continue to apply the transition arrangements with the new employer if, and insofar as, the employee was also entitled to apply them with the former employer.

The Expert Group opinion further considers the situation where an employee is relieved of their duties, put on "garden leave", for example. Employment then ends for the purposes of the application of the 30% facility, as confirmed by case law. If the employee finds a new employer responsible for tax withholding after the employment and the garden leave ends, the 30% facility may not have been applied for a while, but the employee is still an incoming employee for the tax authorities. The employee thus remained an incoming employee without interruption and remains eligible for the transition arrangements if, and insofar as, they were also eligible to claim that right with the previous employer. 

The Expert Group opinion can be found in its entirety here (in Dutch)