Benefits of the 30% ruling
Did you move to the Netherlands for work? Or did you, as a Dutch employer, recruit employees from abroad? Perhaps, you or your employees are eligible for the 30% ruling. The 30% ruling is a tax benefit for expats that you can use for a maximum period of five years, with paying less tax as result. However, not everybody knows all the benefits of the 30% ruling. In this article, we will list them for you.
30% of your salary tax-free
As the name already says: 30% of your salary is tax-free, so you only have to pay taxes over 70%. In the end, you receive more net payment with the same salary than someone without the 30% ruling. We will explain it using the example below.
In the example, we use a monthly gross salary of € 10,000 to calculate. Based on the table, you can clearly see the difference between the same salary of someone with and without the 30% ruling.
|With 30% ruling||Without 30% ruling|
|Gross||€ 10,000||€ 10,000|
|Tax-free amount (30%)||€ 3,000||–|
|Taxable||€ 7,000||€ 10,000|
|Tax||€ 2,800||€ 4,300|
|Net||€ 7,200||€ 5,700|
No tax on your assets
Usually, you have to pay tax on your income from work and homeownership (box 1), substantial interest (box 2), and savings and investments (box 3). But are you eligible for the 30% ruling? What a lot of people don’t know is that you may opt for a partial non-resident status. This means you don’t have to state your box 2 and box 3 income in your annual income tax return.
But be aware: This ruling does not include Dutch real estate and substantial interest in a Dutch BV.
In addition to the earlier mentioned tax benefits for expats, you can be reimbursed (or reimbursed) tax-free for even more costs. You can think of moving expenses, the costs for an initial visit to the Netherlands, and the costs for a work permit.
In addition to these tax benefits, there is another advantage to the 30% ruling. Did you (or did your employee) come to the Netherlands from outside Europe? Then, the 30% ruling ensures that their driving license can be converted into a Dutch driving license.
We are happy to help!
Do you have questions regarding the 30% ruling? Or do want someone to take care of the application? We are happy to help! Please, contact us using the details mentioned below.