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Part III:

  • In which ways will an intra-corporate transfer be treated differently by the Netherlands’ immigration authorities from 29 November?
  • Which ICT applications are fast and will require submission of fewer documents in evidence of compliance?
  • How will the ICT salary requirement of the Directive be applied in the Netherlands? What are the implications for the 30% Dutch tax benefit policy?
  • Can national schemes still be used to work authorize intra-corporate transferees?

The Netherlands is one of the 26 member states of the European Union committed “to bring into force the laws, regulations and administrative provisions necessary to comply” with Directive 2014/66/EC of 15 May 2014 on the conditions of entry and residence of third country nationals in the framework of an intra-corporate transfer (ICT). The member states must communicate the text of their measures to the European Commission in Brussels, ultimately by 29 November 2016.

On 19 October, the Minister of Social Affairs and Employment has started to publish the implementation rules and policies for the Dutch administrative bodies in the States Newspaper (Staatscourant). The Minister has announced that the conditions of the single ICT permit will have effect as of 29 November. In the past weeks, officials of the immigration department IND and the work permit authority UWV have explained their new modus operandi to representatives of companies and the legal services industry.

Essential new elements the Directive brings to the Netherlands and EU are:

• A European standard ICT permit for up to 3 years
• Mobility in the EU during the transfer
• National industry bench mark salaries as a permit condition
• Free national labor market access for dependents

In the weeks towards 29 November, I am writing in Q&A format to briefly capture what the Netherlands’ executive policies for intra-corporate transferees, referred to as ‘expats’, may look like from 29 November onwards.

Although most of the new Dutch ICT policies have been published by now, when preparing for the new practice, a number of ‘what if’ questions have come up which have been noted by public relation officials of the IND.

The write-up below therefore remains provisory and is meant as an overview rather than offering the complete picture in a nutshell. Nevertheless, it presents answers to some of the more important questions of permit appliance for an expat in the Netherlands after the entry into force of the ICT Directive.

In which ways will an intra-corporate transfer be treated differently by the Dutch immigration authorities from 29 November?

The Netherlands now administers 3 programs to work authorize an intra-corporate transferee :

  • The EU ICT Directive
  • The national highly skilled migrant (HSM) program
  • The national ICT-work permit

The EU ICT program is prioritized in favor of the highly skilled migrant program and the national ICT work permit scheme. In practice, this means that an application for an EU ICT permit will exclusively be assessed against the criteria of the EU ICT Directive. If such application does not fall within the scope of the Directive or does not meet its conditions, it will be rejected.

The Directive’s priority further requires the Dutch adjudicators, finding that an application for a highly skilled migrant permit or a national ICT work permit falls within the scope of the EU ICT Directive, to assess such application under the terms and conditions of the ICT Directive and if found compliant, to grant an EU ICT permit instead. If the application does not comply it will be rejected.
Therefore, the initial choice in which ICT program to apply, is important.

An EU ICT permit will be determined by the employment relationship with the sending company and the qualifications of the transferee, while an HSM permit is determined by the market value of the Dutch salary offered to the candidate. The ICT permit of the Directive is exclusively for the intra- corporate employment it was granted for. A transferee on an EU ICT permit may transfer in-country to another group company on the same permit, but cannot switch employers to an out of group company without obtaining a new residence permit including work authorization for the Dutch job market. A highly skilled migrant can switch to other HSM employers with the same permit.

The national work permit program for transfers out of the scope of the Directive remains; the executive policy rules respecting the Directive are published in the State Newspaper (Staatscourant) on 28 November. The concerned single permit application procedure of up to 90 days may not be much different from before 29 November but one wonders for which transfers this national program may still be used. To avoid the scope of the Directive, employment on a Dutch payroll appears a must do and managers, specialists and trainees may not be defined as in the Directive.


Which ICT applications are fast and will require submission of fewer documents in evidence of compliance?


The Directive calls on Member States to set up a simplified procedure of obtaining an EU ICT permit for entities of group companies that have been recognized by their national immigration authorities as a sponsor of such applications.

The Netherlands has complied by adding the EU ICT permit application as a separate option to the existing fast-track online module that the IND operates for employers registered as sponsors of highly skilled migrants.

A most practical way to organize a fast-track procedure for EU ICT applications; statistics indicate that a substantial number of HSM applications is filed by entities of group companies established in India and the United States.

For those companies, the EU ICT application fast-track procedure may be a simple add-on to their sponsorship status at no extra entry fee. Whether new singular ICT entries are possible and at which entry fee (€ 5.183 is the regular rate; for SME’s with up to 50 full-timers the rate will be € 2.592 from January 1st) has not been published yet.

However, legal fees by EU standard must be proportionate and not impede appliance. The EU ICT fast-track application for recognized sponsors will be processed in 2 to 3 weeks as the term of effort and will be based on the ICT company statement including details of transfer and transferee as required by the Directive.

The regular EU ICT permit procedure of the Netherlands has been implemented as a single permit application process of up to 90 days. It is paper filed with the IND and advised by the UWV. As I wrote earlier, the document load is as the Directive requires.


How will the ICT salary requirements of the Directive be applied in the Netherlands? What are the implications for the 30% Dutch tax benefit policy?


Regarding the ICT salaries, the Directive stipulates that “the remuneration granted to the third-country national during the entire intra-corporate transfer is not less favorable than the remuneration granted to nationals of the Member State where the work is carried out, considering comparable positions in accordance with applicable laws or collective agreements or practices in the Member state where the host entity is established”.

To assess compliance with this EU ICT remuneration requirement, the Dutch adjudicators will use the salary criteria of the national highly skilled migrant (HSM) program as a benchmark for the industry of the ICT.
As a result of this, the salary criteria of the highly skilled migrant (HSM) program will be applied in all 3 programs which are available for intra-corporate transferees from 29 November.

What are the implications for the 30% Dutch tax benefit policy?

The 30% tax ruling concerns a Dutch tax benefit for salaries paid to incoming employees who receive their salary pay under Dutch wage tax administration. EU ICT permit holders will as a rule not receive salary pay under Dutch wage tax and will therefore not be eligible to apply for the ruling.

By the same reasoning, standing rulings that have been granted before 29 November are not affected by the Dutch implementation of the Directive.
The other way around, the continued tax ruling benefit policy for expats may well prevent companies and their transferees to the Netherlands from using the EU ICT program.


Can national schemes still be used to work authorize intra-corporate transferees?


The national programs cannot be applied alternatively, only additionally, that is if a transfer falls out of the Directive’s scope. In this way, the Netherlands gives priority to the EU ICT program as it should, but has at the same time saved its national programs for transfers and transferees not covered by the definitions and conditions of the Directive.

To assess the priority of the Directive, the IND and UWV will establish whether the transfer applied for, is based on a Dutch employment contract or on an employment relationship with the sending company which will continue throughout the transfer. For permit application purposes, a transfer while remaining on home country payroll will fall within the scope of the Directive; a transfer executed on a local contract may still be processed under the national program for highly skilled migrants or the national ICT work permit program.

Most importantly for the national ICT work permit program, the Directive respects transfer provisions in bilateral agreements of the Member States. For the Netherlands, the intra-corporate transfer provision for key personnel in Article 2 of the Protocol to the Dutch American Friendship Treaty will be administered for an ICT application by a Dutch entity from a group company in the US. Japanese group companies may also profit from this advantegeous ICT treatment of Americans as the Netherlands and Japan are still together in a commercial treaty including a most favorable treatment of foreign nationals clause.

Ted Badoux

Also see our news articles about the implementation of Directive 2014/66/EC:

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