If you are eligible for the 30% ruling then the taxable amount of your gross Dutch salary is reduced to 70%. Put simply, 30% of your wage is tax free.
The 30% ruling is intended as a reimbursement for expenses that expatriates incur when relocating to the Netherlands and working away from their homeland. These expenses include:
- Application costs for residence permit, visa, driving licence etc.
- Hotel expenses (if expats still live in their homeland).
- Travelling expenses and / or telephone calls to their country of origin.
- Dutch courses costs for the expat and their family.
- Housing costs such as rent or bills (especially in the initial stage).
- Costs of water, energy (gas and electricity) etc. if prices in the Netherlands are higher than in the country of origin.
How the 30% ruling works
The 30% ruling is coordinated and supervised by the Belastingdienst (Dutch tax office).
It’s possible to calculate the fiscal benefit of the ruling by calculating 30% of your gross annual salary. This amount is free from payroll and income tax. The remaining gross salary (70%) will be taxed at the corresponding tax rate.
Pension premiums and bonuses do not usually fall under salary recognised by the ruling. Neither do severance payments.
Duration of the 30% tax ruling
Please note, as of January 1, 2024, the rules are as follows:
- From months 1 to 20: Expats do not pay tax on 30% of their income
- From months 21 to 40: Expats do not pay tax on 20% of their income
- From months 41 to 60: Expats do not pay tax on 10% of their income
- From month 60+: Expats pay tax on their entire income
Other benefits and advantages
In addition to the tax break, the 30% ruling has other advantages. These include:
- Possibility to select "non-resident status" when filing your income tax to be a non-resident taxpayer in Box 2 and Box 3 on your income tax return. This means you can avoid paying tax on assets in Boxes 2 and 3 (except for real estate investments).
- Possibility to exchange your foreign driving licence for a Dutch one without taking the (otherwise required) driving test.
- Possibility to have a free allowance for extraterritorial costs for international school fees.
All other income tax deductions remain applicable.
Entrepreneurial expats can also use the 30% ruling if employed by their BV (limited liability company), or they can take advantage of this tax advantage to attract more specialists from abroad.
Am I eligible for the 30% ruling?
To benefit from the 30% ruling you must meet certain requirements that define you as a highly skilled migrant. An overview of these conditions is listed below:
- You must be an employee of a company in the Netherlands.
- You have specific professional expertise that is scarce or not available in the Netherlands. Highly skilled migrants are deemed to have such expertise when their income meets the salary requirements (listed below).
- You and your employer agree in writing that the 30% ruling applies to your situation.
- You have been recruited or transferred from abroad (and you have lived more than 150 km from the Dutch border for more than 24 months prior to working in the Netherlands.)
For more details visit the 30% ruling requirements page.
How to apply for the 30% ruling
To apply for the 30% ruling you and your employer should file an "Application Income tax and national insurance 30% facility" with the Belastingdienst.
Can I apply late for the 30% ruling?
If you only recently discovered that you meet all the conditions it’s still possible to apply for the 30% ruling. Whether you are eligible for any back-payments depends on when you apply.
If you submit the application within four months of starting your employment then the ruling will be retroactively effective to also cover those first four months. If you submit the application after 4 months of starting your qualifying job the ruling is effective on the first day of the month after the month in which your application was successful.
It’s still possible to apply years after having worked or lived in the Netherlands. Please note, that previous years will not be taken into account and will be deducted from the the term that you can receive the 30% ruling.
Can I change employer?
If your employment with the 30% ruling is terminated, it’s possible to apply for a continuation of the ruling if you find a new job (that meets the requirements) within three months of the termination of your previous job.
