Affordable Healthcare Act & Dutch 30% Ruling

July News Letter

Happy Birthday USA.  Enjoy your holiday but remember to be safe and thank a veteran.

Below is a list of hot tax topics.  We hope you find the information helpful and useful.


This past Thursday, June 28, 2012, the Supreme Court upheld the individual mandate of ObamaCare.  Therefore, we can only hope for a repeal of the law and plan for the individual cost.  While waiting and hoping for a repeal, GEMMS is advising its clients of the two most taxing effects of ObamaCare (1) the new individual tax assessed for health insurance and (2) every US citizen and every individual living or working in the US are now required to file a US tax return.

In order to provide health insurance to everyone in the US, all taxpayers (aka the 51%) are now required to pay $695 per person or $2,085 per family to the US federal government on their annual tax returns.  Although President Obama said several times this was “not a tax,” the Supreme Court has confirmed this is in fact a tax.  If a taxpayer can prove they pay more than the above amounts to US Insurance providers or Medicare, than the above amounts will be reduced accordingly.  For example, a retired US expatriate living in the UK paying UK insurance only, will be required to pay these taxes to the US federal government.

Additionally, GEMMS would like to note that in order for the US government to appropriately collect these funds, every US citizen and every individual that works or lives in the US will now be required to file a US federal tax return.  The individuals that historically never file returns because their income is either under the thresholds or their social security is non-taxable (aka the 49%) will now be required to file a US federal tax return in order to pay their fair share of health insurance.  For example, a non-US citizen that lives outside the US and works in the US for only a couple of days per year will now be required to file a US federal tax return in order to pay into the US Nationalized Health Care System – aka ObamaCare.


Significant changes in the Dutch 30% allowance ruling as of January 1, 2012.

The 30% allowance ruling has changed signifiantly as of January 1, 2012. The most important changes are that the duration of the ruling has been reduced from 10 to 8 years and that the requirements for obtaining the ruling have changed significantly.

In order to qualify for the ruling, an employee must now prove that he has been hired from outside a 150 kilometre radius from the Dutch border (i.e in the 24 months prior to the employment in the Netherlands, the employee must have lived outside the 150 kilometre radius for at least 16 months). Additionally the employee must meet a minimum salary criterion. As a consequence the taxable salary under the 30% allowance ruling (i.e the 70%) must amount to at least Euro 35,000 for 2012. This salary criterion will be indexed annually. For 2012 this means that in order to benefit maximally from the 30% allowance ruling, the salary before application of the ruling (i.e. the 100%) must amount to at least Euro 50,000. Exceptions to the salary criterion however apply for scientific researchers, employees under the age of 30 who have obtained their master at a foreign university during the last 12 months and PHD graduates.

Please note that if the employee has a lower salary than Euro 50,000, this does not automatically mean that the employee is not eligible for the ruling. It is namely possible to reduce the amount of the tax free allowance in such a way that the taxable salary amounts to at least Euro 35,000. If an employee would for example have a salary of Euro 36,000, he can still benefit from the ruling, but his tax free allowance can only amount to Euro 1,000.

Another important change in the ruling is that the ruling ends when the employment in the Netherland ends. The ruling is consequently no longer applicable to all benefits from current employment that are received after the end of the employment. This would apply to bonuses, the benefits deriving from stock based remuneration, equalisation payments but also to the final reconciliation of the holiday allowance, holidays, 13. month etc.

For employees who have already obtained the ruling prior to January 1, 2012, grandfather clauses have been implemented as well. Depending on how long the employee has enjoyed the ruling prior to January 1, 2012, on the basis of these grandfather clauses the employee is allowed to continue the ruling unchanged for either a maximum period of five or ten years.

In case you would like to apply for the 30% allowance ruling for any of your employees, we strongly advice you to seek expert advice on the matter. For questions you can contact Gilianne Nelissen of  Luminous Tax Matters in the Netherland at +31 20 6549600 or

As always please feel free to contact us if you have any problems, questions, or concerns.

One thought on “Affordable Healthcare Act & Dutch 30% Ruling

  1. The individuals at McGladery have done some research and proposes that:

    (1) this individual mandate only pertains to US Citizens and Resident taxpayers (therefore non-resident US taxpayers will not be subject to the ACA individual mandate).

    (2) individuals living outside the US will also not be subject to this ACA individual mandate.

    You can read more here –

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