Moving to Holland is not easy, but it's worth the effort. This blog tells the story of shifting from American life in Pittsburgh to Expat life in the Netherlands,
and all of our European adventures that follow.

Saturday, April 4, 2009

Taxation without representation…

The following is one of the more frustrating Dutch tales that we have to tell. To put it into lay-terms (because that's all I know anyway), there is a rule in Holland called the 30% Rule where if you are a "knowledge worker," such as Chad, then 30% of your salary is not taxed. A knowledge worker is someone who proves to provide a specific function or job that cannot be filled by any other person in Holland. It is also important to note that the Dutch tax expats somewhere between 45-48%, so the 30% Rule is quite helpful & important for us poor expats.

Before we moved to Holland, Chad did his homework and learned about this wonderful 30% Rule. He did what anyone would do, and asked the HR rep from Erasmus MC about the rule, and what specific steps he needed to take this rule. He was informed by his HR, presumably the experts in the subject, that he was not eligible for this rule because it only applies to people who come from third world or impoverished countries. Bummer.

So, tax time comes around this year and Chad finds a tax guy to do our NL taxes (which is a must because taxes are confusing enough… just trying doing them in Dutch). The tax person asks Chad why he is not enrolled in this 30% Rule. Chad repeats what he was told by his HR about not being from a third world country. The tax guy laughs, shakes his head, and says in so many words, "that's a good one." He asked Chad to send him his job description of the work he is doing at Erasmus, and if he doesn't understand more than 5 words, he'll be a shoo-in.

Of course his job description is quite complicated, so he "passed" with flying colors. The tax guy proceeds to fill out the forms, and Chad is approved for the 30% Rule. But, unfortunately for us, it is Not retroactive. Damn! So, we lost this money for the first 10 months we lived here when he was not enrolled. Chad of course informed his friendly HR rep so as to try to help prevent such an unfortunate fate of the next expat who may dare to move to Holland.

Just another example of something you have no control over, that is incredibly frustrating, and that you just have to learn how to live with. If you are one of these people reading this who is moving to Holland as a knowledge worker, don't take no for an answer. Find someone who Knows! Like the public service announcements say: "The more you know!"


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