We regularly receive questions about the 30% ruling and what one should pay attention to when dismissing or changing employers. In this article, we explain what the possible consequences may be when you are faced with dismissal and how this affects the 30% ruling.
No. By law, a severance payment belongs to 'wages from previous employment' and you cannot therefore apply the 30% rule to this payment. The 30% ruling may only be applied to 'wages from current employment'. According to established case law, reimbursements that are not directly related to work qualify as wages from previous employment. As the severance payment is not matched by any directly identifiable employment of the (former) employee, the 30% ruling may not be applied.
Yes, as long as the allowances relate to past employment, such as holiday pay, vacation days and accrued bonuses, the 30% rule may be applied to them. It is therefore important to split these allowances so that it is clear which payment refers to wages from past employment (the severance payment) and to wages from present employment.
Many times a dismissal is settled with a settlement agreement. Employees with a 30% scheme should then pay attention to any period of exemption. The 30% rule ends on the last day of the pay period following the period in which the last working day falls. For example, if the last working day is 15 February, if the pay period is 1 month, the employer may apply the 30% rule until 31 March. The same applies to inactive employees.
The 30% ruling is detailed in the Payroll Tax Act 1964 and the Implementation Decree based on it. Under section 10ed of the Wage Tax Implementing Decree 1965, you have 3 months (not calendar months) to activate the 30% rule with a new employer. On 29 January 2016, the Supreme Court ruled that the three-month period is a hard and non-smooth period. Suppose you stop working on 15 May, then the three-month period starts to run on 16 May.