The 30% ruling
Requirements
Benefits
Application
The 30% ruling
Conditions
Benefits
Application
Contact
The 30% ruling is a tax advantage for highly skilled migrants who moved to the Netherlands for a specific employment role. If you are eligible for the 30% ruling, you don’t have to pay tax over 30% of your gross salary in the Netherlands.
Did you move to the Netherlands to work for a Dutch employer? The Dutch tax office (Belastingdienst) is of the opinion that employees who came to the Netherlands are confronted with extra costs, so-called extraterritorial costs. As compensation for these costs, your employer may give a tax-free allowance for this. The other option is that the employer provides 30% of the wage, including reimbursement, tax-free. This is also known as the 30% ruling. On this page, we further explain the 30% ruling and its benefits.
Did you move to the Netherlands to work for a Dutch employer? The Dutch tax office (Belastingdienst) is of the opinion that employees who came to the Netherlands are confronted with extra costs, so-called extraterritorial costs. As compensation for these costs, your employer may give a tax-free allowance for this. The other option is that the employer provides 30% of the wage, including reimbursement, tax-free. This is also known as the 30% ruling. On this page, we further explain the 30% ruling and its benefits.
The 30% ruling has three benefits besides the tax-free salary part. These are the benefits of the 30% ruling:
The main advantage of the 30% ruling is the tax-free salary part. If you benefit from the 30% ruling, your employer may reimburse 30% of your salary tax-free. Your taxable income will be lower, which means that you pay less tax than someone without the 30% ruling.
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 |
A Dutch tax resident with the 30% ruling can choose to be treated by the Belastingdienst as a partial non-resident taxpayer of the Netherlands. This means that you will be considered as a non-resident taxpayer for boxes 2 and 3. For box 1 income you will still be considered as a resident taxpayer. So, in this case, you don’t have to pay income tax on assets in boxes 2 and 3 (besides real estate located in the Netherlands and substantial interest in a Dutch company) when you file the annual income tax return.
Due to another adopted amendment to the Tax Plan for 2024, the partial foreign tax liability will also be abolished as of January 1, 2025. Employees who benefited from the 30% scheme in the last wage period of 2023 can still use the 30% scheme until 2026 on the basis of the transitional law. the exemption for box 2 and box 3.
Another great benefit of the 30% ruling is the possibility to exchange your foreign driver’s license for a Dutch driver’s license. In most cases, you have to redo your driver’s license test in order to obtain a Dutch driver’s license. If you have the 30% ruling. It is possible to exchange your foreign driver’s license for a Dutch license without redoing the test. And even all of your family members at the same address as the holder of the 30% ruling don’t have to redo the test.
The 30% ruling has a maximum duration of 5 years. From 1 January 2024, the tax-free allowance may amount to a maximum of 30% of taxable income in the Netherlands for the first 20 months. For the following 20 months, the untaxed reimbursement will be a maximum of 20% of the taxable income. For the last 20 months, the tax-free allowance is a maximum of 10% of taxable income.
If the 30% scheme is shorter than 5 years, the employee can still enjoy the 30% for the first 20 months, the 20% for the second 20 months and 10% for the remaining months. For example: If you have a 4-year decision, the application is as follows: 20 months maximum 30%, 20 months maximum 20%, and 8 months maximum 10% untaxed.
Are you eligible for the 30% ruling? Before you can benefit from the tax benefits, you have to apply for the 30% ruling. You and your employer have to agree in writing that the benefit applies to you. We can help you out with the 30% ruling application! You can call us at +31 20 – 2170120 or fill in our contact form.
As of 1 January 2024, the 30% rule may only be applied up to the maximum income stipulated in the Top Income Standard Act, the so-called Balkenende norm. In 2024, this is set at €233,000, up to a maximum of 30% of this WNT norm, an employer may still provide tax-free compensation. This is still subject to a transitional rule for employees who already applied the 30% rule in December 2022. For them, this capping measure does not apply until 1 January 2026.
Another adopted amendment to the 2024 Tax Plan also abolishes partial foreign tax liability from 1 January 2025. This means that from 1 January 2025, box 2 and box 3 assets will also be taxed.
The transitional rule applies if the 30% rule has already been applied to payroll by December 2023. This transitional rule means that the ‘old’ 30% rule remains fully applicable. This means that for anyone who enjoyed the 30% rule before January 2024, there are no changes. Even if the employee switches employers, the transitional rule will continue to apply under certain conditions, in which case it is important that the employment contract was agreed upon within 3 months of the end of the previous employment. Employees who enjoyed the 30% rule over the last pay period of 2023 can still use the exemption for box 2 and box 3 until 2026 based on the transitional law.
From 1 January 2019, the duration of the 30% ruling is 5 years. During these 5 years, employees were allowed to receive up to 30% of their income taxable in the Netherlands untaxed. You are also considered a foreign taxpayer for box 2 and box 3, which means your box 2 and box 3 assets are untaxed in the Netherlands. Except for property in the Netherlands and a substantial interest in a Dutch bv or nv. For the income in box 1, however, you remain taxable.
The expiration of the 30% ruling reduces net income and ends exemptions like partial non-resident taxpayer status. We outline the impact on tax returns, including changes in liabilities and considerations for assets and fiscal partnerships. What are the fiscal consequences if the 30% ruling expires after 5 years? We explain it in our blogpost about what happens when your 30% ruling ends.
Starting in 2024, it works as follows. For the first 20 months that you use the regulation, up to 30% of your income will be tax-free. In other words, you don’t have to pay tax on that 30%. From the second 20 months, the same applies, but for 20% of your income. Perhaps you can already guess, but for the third 20 months you don’t have to pay tax on 10% of your income and from the fourth 20 months you have to pay tax on your entire income. So every 20 months, the percentage of tax-free income decreases by 10%. It goes from 30%, to 20%, to 10%.
Yes, the 30% ruling applies to bonuses and holiday allowances if they are categorized as income from current employment. Essentially, this means that part of your bonus and holiday allowance can be tax-free under the 30% ruling.
Do you meet all the criteria for the 30% ruling? Then you can benefit from this special tax benefit for expats in the Netherlands. To apply for the 30% ruling, you and your employer have to ask the Belastingdienst permission to make use of the 30% ruling. We are happy to help you apply for the 30% ruling. Fill in our contact form or call us at +31 20 – 2170120.
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Robin Molenaar2023-12-20 13:12:422024-04-24 08:06:59Do you know these 4 new 2024 tax rules already?
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boy2022-05-25 16:43:422024-01-03 17:07:0530% ruling | Dutch government introduces salary cap
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boy2022-04-22 12:58:142024-04-08 09:36:40The 30% ruling expires: fiscal consequencesTalk directly to one of our tax advisors
Could you use some help with the application of the 30% ruling, or other Dutch taxes, like your income tax return or provisional tax return?
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Send your message to +31 20 – 2170120
Call us on +31 20 – 2170120
