30% Tax Ruling
The 30%-ruling allows employers to grant certain employees having special skills or expertise which are scarce or absent on the Dutch labour market, a maximum tax-free allowance of 30% of their salary.
To qualify, the employee must - amongst others - be hired from abroad and meet the following salary criterion:
- You have been hired outside the Netherlands or you have been transferred to work in the Netherlands.
- You are employed by your employer.
- Your specific expertise is almost impossible to find on the Dutch labor market.
For this specific expertise the following applies:
For employees older than 30, the required taxable salary for 2023 must be € 41,954 or more.
For employees younger than 30 and holding a qualifying master title, the required taxable salary for 2023 must be € 31,891 or more (For researchers conducting scientific research at a specific research institution, no salary criterion applies).
- From the 2 years prior to your 1st working day in the Netherlands, you have lived outside the Netherlands for more than 16 months and also at a distance of more than 150 km from the Dutch border.
- You have a valid decision for the 30% ruling. The duration is noted in the decision. In case you stop working before, then the 30% ruling stops as well.
- The request must be submitted together with your employer.
This tax-free allowance is meant to compensate for additional expenses incurred during a temporary stay outside the country of origin (extra-territorial costs).
As of 1st January 2019, the ruling is only applicable for a maximum period of 5 years. Please note for notifications issued before January 1, 2019 transitional rules may apply. This period will be reduced with possible periods of earlier stay and/or employment in the Netherlands. The 30%-ruling has certain consequences in terms of social security. Social security rights and premiums may also be affected as these will be based on salary only, thus excluding the 30% allowance. Pension rights, however, can be based on the salary plus the tax-free 30% allowance provided it does not exceed the general maximum pensionable base.
Another important feature of the 30%-ruling is that investment income will - in general - not be subject to Dutch taxation (box 3). The 30% ruling is only applicable if approved by the Tax Administration Authority (Belastingdienst). The employer and employee need to file a joint request to apply for the ruling. The request for the 30% ruling must be filed within four (4) months after the start of employment. Requests that have not been filed within four (4) months, will not have a retroactive effect from the start date of the employment. In that case, the 30%-ruling will only be applicable as of the month following the date of the request.
Resident Tax Payer
If you move from another country to the Netherlands, this will (usually) constitute immigration. From the moment of immigration, you will for tax purposes, be considered a resident taxpayer. This means that you have to pay income tax and national insurance contributions in the Netherlands.
International Aspects of Taxation
Individuals resident in the Netherlands are subject to income tax on their worldwide income. This is known as resident tax liability. Measures have been taken to avoid double taxation whereby resident taxpayers pay tax twice on all or part of their worldwide income or profits.
Avoiding Double Taxation for Resident Tax Payers
Resident taxpayers can avoid being taxed twice on their foreign-source income and foreign-source profits in two ways. In the first place, the Netherlands has concluded bilateral tax treaties with a large number of countries. In the second place, the Netherlands has unilateral provisions that in general apply to situations where no treaty has been concluded with a specific country or where a tax treaty does not include a provision pertaining to a specific case.
Note: often international companies offer tax services to expats via special tax consultants.
For more information: Dutch Tax Authorities - English website
See section I am a partner for more information