30% tax ruling in the Netherlands

Are you a highly skilled multilingual considering a move to the Netherlands for work? If so, you might be entitled to a unique tax benefit known as the '30% ruling.' In this article, we will explore the key requirements for the 30% ruling and help you determine whether you qualify for this advantageous tax benefit.

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What is the 30% tax ruling in the Netherlands?

What is the 30% tax ruling in the Netherlands?
Spoiler: it’s a good thing!

Are you a highly skilled multilingual considering a move to the Netherlands for work? If so, you might be entitled to a unique tax benefit known as the 30 percent ruling*. This special tax arrangement is designed to attract and retain international talent by offering a significant tax advantage. In this article, we will explore the key requirements for the 30 percent ruling and help you determine whether you qualify for this advantageous tax benefit.

What is 30% tax ruling in the Netherlands?

Moving to the Netherlands for work, one might come across additional and sometimes unexpected expenses, including extra costs of living, costs for travel and shipping, converting official papers, housing costs, etc. An employer may provide an additional tax-free reimbursement for these payments, or they can choose to pay 30% of the salary tax-free. This is what is called the 30% ruling (or 30% regeling in Dutch).

From a tax perspective, the salary agreed between you and your employer is reduced by 30%. In exchange, you receive an expense allowance of 30%. This is the most common way to apply the arrangement because it does not affect the employer’s salary burden. However, the employer is not obliged to pass on the financial benefit of the scheme to the employee. In practice, the employer can take all or part of the benefit itself. You and your employer must agree in writing that the plan applies.

The program offers expats a significant financial boost, at the same time making the Netherlands more attractive for international talents. Win-win!

When are you eligible?

You can benefit from the 30% tax ruling if you come to work in the Netherlands, if you meet all the following conditions.

  • you are officially employed by your employer;
  • you have specific expertise that is difficult or impossible to find on the Dutch labor market. In 2023 you have this expertise if your salary is more than €41,954 or €31,891 gross if you are younger than 30 years or have a Dutch academic master’s degree;
  • you were recruited outside of the Netherlands. In the 24 months before your first working day in the Netherlands, you must have lived at a distance of more than 150 km from the Dutch border for more than 16 months.

Do you meet all the conditions? Always consult Belastingdienst for the latest info and to insure your eligibility.

How long does the 30% ruling apply?

The maximum duration of the ruling is five years. This only applies to applications approved after 1 January 2019. Applications approved between 1 January 2012 and 1 January 2019 had a maximum duration of eight years, but new legislation may affect the end date*.

How to apply

Usually the employer is responsible for applying for the 30% rule on your behalf, so make sure your employer applies via The Dutch Tax and Customs Administration (Belastingdienst). Be sure to include all requested attachments with your request. What these are will become apparent when you complete the form. Upon receipt of your request, you will receive a response within eight weeks.

Pro tip: go to thetax.nl to calculate (for illustrative purposes) a potential net salary with or without 30% tax ruling, holiday allowance, etc.

 

*Recently, the House of Representatives decided to phase out tax benefits. According to the parliamentary proposal, the arrangement will continue for five years, but changes are planned. In the first 20 months, 30 percent can still be received tax-free, followed by 20 percent for 20 months, and finally 10 percent for 20 months. These changes will only apply to people who use or start using the tax ruling from Jan. 1, 2024. For those already using the tax ruling, everything will remain the same, and they can still receive 30 percent of their salary tax-free for five years. So as of 1 January 2024, the 30% ruling for highly-skilled employees recruited from abroad will be scaled back if the Upper House of Parliament also adopts the bill.

Meet the author:

Anna Nasonova is Russian but also speaks English, French and basic Dutch, so she is a true international. She knows better than anyone what you encounter when you start living and working in the Netherlands and is happy to help you with this in her role as international Talent Sourcer.

Would you like to learn more about this topic or have a conversation with one of our Multilingual experts? Feel free to contact Anna.

 

Read more:

Anna Nasonova - International Talent Sourcer

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