Expat Payroll

30% Tax Ruling

’30 Tax Ruling Netherlands’

You’ve probably heard the term ’30 tax ruling Netherlands’ in relation to highly skilled migrants.
But what are the details and benefits of it?

30 Tax Ruling Netherlands: What Is It And Why Is It Important?

’30 tax ruling Netherlands,’ officially known as the 30-percent tax ruling, is a Dutch tax exemption for employees who were hired abroad to work in the Netherlands. Depending on the situation, you may be able to pay 30 percent of an expat’s salary as a tax-free allowance. This is considered a compensation for the expenses the employee is required to make outside their home country.

Claiming The 30-Percent Tax Ruling In The Netherlands

Want to claim the 30-percent tax ruling in the Netherlands? A number of conditions determine whether you are eligible. For your convenience, we have set these out below.

  • You must be registered with the Dutch tax office and pay payroll taxes.
  • You and the employee should agree in writing that the 30-percent tax ruling is applicable.
  • You should either recruit the employee abroad or transfer them from abroad.
  • The employee’s expertise is only scarcely available in the Netherlands.
  • At the time of hiring, the employee has not resided within 150 kilometers from the Dutch borders for the last 18 out of 24 months.
  • The employee’s salary is at least € 37,296 per annum, unless you’re hiring a PhD and Master’s graduate under the age of 30, in which case the minimum salary should be € 28,365.
The 30 Percent Ruling For PhD And Master’s Graduates

Less strict rules apply for PhD and Master’s graduates younger than 30 years:

  • The minimum salary requirement is EUR € 28.350
  • If the PhD was completed in the Netherlands, the requirement of ‘being recruited from abroad’ does not have to be met if the candidate is hired within a year of completing his or her studies.

How Does The 30 Percent Ruling Work?

Having read the above conditions, you may see that you are eligible for the 30 percent ruling, but what does it actually mean? The salary you agreed on will be reduced by a maximum of 30 percent. In return you will receive this percentage as a reimbursement for expenses. This is the most common way as it does not influence the salary burden for the employer. However, the employer is not obliged to pass on the advantage of the 30 percent rule to the employee. In practice it is possible for the employer to partially or fully take the benefit.