30% Ruling Netherlands
Foreign employees with specific expertise working in the Netherlands may be eligible for the so-called 30% ruling. This ruling allows that such employee is provided by his employer with a tax free allowance amounting to 30% of his or her salary if certain requirements are met. As a result, the employee’s net salary increases while the employer’s total costs regarding the employee remain the same.
The allowance is a compensation for “ extra territorial expenses” of working outside the home country. In principle such expenses could be reimbursed by the employer tax free, which considering the amount of paperwork obviously may be burdensome. The 30% ruling provides for a lump sum tax free allowance of 30% of the salary of the employee.
The 30% ruling in addition provides for an exception on declaring savings and investments in the employee’s Dutch personal income tax return. Also, the ruling’s holder and the holder’s partner can simply “exchange” a foreign driving license into a Dutch one (so no need to pass driving tests).
Eligible for the 30% ruling are foreign employees with specific expertise and if certain requirements are met. These include:
- The taxed part of the gross salary should be at least EUR 38,961 annually (2021 rate). For a migrant of less than 30 years of age a lower threshold of EUR 29,616 (2021 rate) applies if the person’s diploma would be considered a (scientific education) master according to Dutch standards.
- The employee should have been living on a distance of more than 150 km from the Dutch borders (European part) for a period of more than 16 months within the 24 months before the first day of the Dutch employment.
We can assist with a 30% ruling application for a total fee of € 450. This fee includes limited research on your eligibility and the application itself. Please contact us if you feel that you may qualify for this arrangement. We could also provide you with a second opinion in case your initial application was denied.
Should you wish that we take care of your request, the following steps are to be taken:
- Completion of our 30% questionnaire, which can be downloaded here and which consists of 2 parts:
- Client questionnaire, to be completed by the employee. The documents required are indicated in the form.
- Power of attorney, to be completed and signed by both the employee and the employer.
- We will file the request in case we expect that the ruling will be granted and communicate with the employer, employee and the Dutch tax authorities where appropriate.
- We will review the ruling (if granted) and forward it to the employer with a copy to the employee.