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Tax advantage for expats: The 30%-ruling

Expats working in The Netherlands are entitled to the 30% ruling. It is a facility for employees from abroad who possess special expertise which is scarce on the Dutch labour market. The 30% ruling is applied on your renumuration (salary, bonus etc) and ensures that up to 30% of the gross renumeration received is not taxed since it is treated as a tax-free cost allowance! With a top tax rate of 52% application of the 30% ruling provides a major tax advantage!

Advantages of the 30% ruling are:
  • 1) Your tax rate is equivalent to a maximum rate of approximately 36.4%;
  • 2) You are not taxed on your worldwide savings and investments;
  • 3) The 30% ruling will be provided for a maximum duration of eight years.
The 30% ruling is only applicable when you satisfy the following conditions:
  • 1) You must be an employee and work for an employer withholding Dutch payroll tax;
  • 2) You must have specific expertise which is scarce in The Netherlands;
  • 3) You must have been recruited from abroad or have been transferred from abroad to The Netherlands;
  • 4) You must not have resided within 150 km of the Dutch border for more than 16 months out of the last 24 months prior to the start of your employment in the Netherlands.
  • 5) You must submit an application for the 30% ruling within 4 months of starting your job in The Netherlands in order for the 30% ruling to have retroactive effect.
Phd graduates may apply for the 30% ruling even if they are not recruited from abroad and/or live within 150 of the Dutch border within 1 year of their graduation.

In 2016, the annual taxable salary for an employee must be more than €36,889 (€36,705 in 2015). A lower salary of €28,041 is applicable for those who have completed a Master's degree and are younger than 30 years old (€27,901 in 2015). Scientific researchers, employees working in scientific education or doctors in training do not require a minimum salary in order to apply for the 30% ruling.

Attention: If you change employer you must reapply for the 30% ruling within 3 month of ending your previous job contract.