30 percent tax rule
30% ruling Netherlands
Working and living abroad is an exciting adventure that comes with adapting to new cultures and laws. As an example, you may have heard of the 30 percent rule for expats; a tax benefit for foreign employees and their Dutch employers that compensates for high housing and travel costs. We can guide you through the application process for the 30 percent ruling in the Netherlands, including its conditions and requirements.
RULES & REQUIREMENTS FOR NETHERLANDS TAX 30 RULING
Only if the 30 tax ruling conditions are met, the expat qualifies for the scheme. When applying for the 30 percent ruling, you must provide the Dutch Tax Office with copies of legal documents and a written agreement and statement from the employer. Below you will find the rules and requirements for applying for the 30 ruling in the Netherlands.
Rules 30 ruling Netherlands
Foreign workers usually have higher housing, travel, and living costs. To compensate for this, the Dutch government allows employers to pay out 30 percent of their wages as a tax-free allowance.
To qualify for the 30 percent ruling, expats must meet a number of requirements and the employer needs to submit a request to the Dutch Tax Office (Belastingdienst). In addition, foreign workers must meet the following 30 ruling criteria:
- The expat is registered in the Netherlands and employed by the employer submitting the 30 tax ruling application.
- The expat contributes to the Dutch economy through their specific knowledge.
- The expat has been recruited outside the Netherlands.
- The expat has a valid work permit.
Requirements 30 percent ruling Netherlands
To qualify for the 30 tax ruling Netherlands, the Dutch authorities also enforce a number of additional rules regarding the education, salary, and age of the foreign employee.
- The 30 percent ruling minimum salary must be more than €46,107 (2024), excluding the tax-free allowance. In 2023, the salary had to be higher than €41,954.
- If the expat is under the age of 30, he or she must hold a Dutch academic master’s degree or a similar foreign degree. His salary must also be higher than € 35,048 (2024), excluding the tax-free allowance. In 2023, the salary had to be more than € 31,891.
- The expat conducts scientific research at a designated research facility or is a doctor in training to become a specialist. In this case, the height of the salary is not relevant.
The financial benefit from 30 ruling tax Netherlands
The 30 ruling for employers provides an alternative for reimbursement of the extra costs that are made by hiring foreign employees. Instead of reimbursement of the actual costs, the 30% ruling allows employers to pay out 30 percent of the salary tax-free during the first 20 months of employment. The 20 months after that, they may pay 20% of the salary tax-free. The next 20 months this will be 10%. The advantage of the 30/20/10 percent ruling for the expat is a higher net income. This makes the Netherlands an interesting country for foreign workers and knowledge migrants. The 30 ruling is one of the top three reasons for expats to come to the Netherlands.
Implications of the 30 ruling
The 30 percent tax ruling provides various benefits for both the employer and employee. However, it is important to carefully consider the significant changes and implications that come with the decision to apply for the ruling. Keep reading below to discover more about the potential implications for your spouse, changing employers, and more.
30 ruling Netherlands spouse
And what about your spouse? Let’s say you come to The Netherlands with your spouse and he or she benefits from the 30 percent ruling, can the dependent spouse also apply for the Netherlands tax 30 ruling once he or she finds a job in The Netherlands? Unfortunately the answer is no. If the spouse finds a job while everything is settled in the Netherlands, he or she will be treated as a locally hired employee for whom the 30% ruling is not applicable.
30 ruling change employer
If you change employer during your stay in the Netherlands and you have been granted the 30 ruling, you must apply for the 30% ruling again. Your new employer will have to submit a new application for the remainder of the period for which you have already been granted the 30 ruling.
30 ruling self-employed
If you decide to quit your job and become self-employed, it depends on how you set up your business whether you can (partially) keep the 30% rule. The 30% ruling only applies to income from your current employment. If you decide to become self-employed, you will no longer be an employee and the 30% rule will no longer apply.
Limited company
If you set up a limited company that employs you, then you can apply to the tax authorities to grant the 30% ruling for your work for your own limited company. However, a limited company will involve extra administration and costs though. If you keep your job partially and also become self-employed you can keep the 30% ruling on your employment income if your total income is high enough. This can become complicated for your employer to determine and because of that they may not be willing to cooperate
How to calculate 30% ruling
Before you consider yourself rich, it is wise to calculate what the real benefit is for you as an employer or employee. In general, you can say that a highly skilled migrant with an annual income of €60,000 will receive a net income €2,000 higher under the 30% ruling. How to calculate the 30 ruling is something you best leave to a professional financial advisor.
30% ruling calculator
It is advisable to seek guidance from a specialist when applying for the 30% ruling since it is a complicated and time-consuming procedure. If you want to obtain an estimate calculation, you can utilize a Dutch 30% ruling calculator online.