30% Ruling explanation

30% Ruling in the Netherlands

The 30 ruling in the Netherlands is a tax incentive to attract qualified expat employees to the Netherlands. In case the 30 ruling is granted by the Dutch tax authorities, the expat employee will receive a taxable salary reduced to a 70% taxable salary. In other words: 30% of the agreed income will be exempt from wage tax and personal income tax. (f.e. an individual earns € 100,000 gross, € 30,000 will be exempt. The taxable income is € 70,000).

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Advantages of the 30 ruling:

  • Relief of wage and income tax (taxable salary) for the employee
  • Employer can reimburse the extra territorial costs of the employee tax free
  • The foreign driving license can be changed into a Dutch
  • Extra reimbursements (tax free) for certain costs, such as International school
  • Entrepreneurs who set up their own business in the Netherlands (with a foreign- or Dutch entity) can also use the 30% ruling
  • Employers might attract more easily employees with specific scarcity (specialists)
  • When filing a tax return you can choose to be taxed as a deemed non-resident tax payer (no 1,2% wealth tax and no reporting of foreign investment)

Forgot to apply for the 30 ruling?

In case you found out that you met all the conditions for the 30 ruling when you arrived in the Netherlands. However, you did not apply for it that time and you are now already working in the Netherlands for some years here. What can you do then? What you can do, is still trying to apply for it. In case the Dutch tax authorities grant you the 30% ruling, the total duration of the ruling will be reduced then with the period you already resided in the Netherlands. We see many times in practice that the employer does not want to apply for the 30% ruling here in the Netherlands. However, the employee would have been eligible for it. Then, it is possible to apply for the 30% ruling if you change jobs. Another possibility is set up you own Dutch BV and become an employee of your own company. See for more info about this topic: 30% ruling and having your own Dutch BV