Deepak has been working as an IT expert for an American multinational for years. He is the hero of his close-knit family in Mumbai, as Deepak has been to Paris, New York, London and Berlin. Places his parents only know from TV. A different world, which has suddenly become close. Especially since the beginning of 2019, when Deepak started working as an expat in Amsterdam for an extended period of time. Actually, this would be for six months, but Deepak has been living in a rental apartment in the Bijlmer for two years now. His wife Nayna has come over and their first child will be born in April. What is clear is that this will happen in the Netherlands. In the search for a new home, Nayna heard good stories about Amstelveen, where a large community of expats from India lives. Houses with gardens and a good international school nearby. Deepak and Nayna also decided to buy a house there.
To complete the mortgage, Deepak requires an employer's statement. The employer's statement of the employee, in addition to the salary slip and/or annual statement, serves as a tool for the mortgage lender to determine the long-term affordability of the mortgage loan.
Payroll administrator Tim creates the employer's statement for Deepak. Okay, how did it work again? Deepak, like many expats, is taking advantage of the 30% rule, a tax break to cover the extra costs for expats. From a tax perspective, there are two ways to apply the 30% rule:
- The employer may pay up to 30/70 of the salary, excluding the allowance as a tax-free allowance
- The employer may provide 30% of the employee's salary, including the allowance, tax-free. In other words, 30% of the salary including allowance (100%) is calculated; this 30% is paid as a tax-free allowance.