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30% Tax Ruling

1. In a nut shell

The 30% tax ruling is a beneficial tax facility for employees who are recruited from abroad to work in the Netherlands with a specific knowledge that is not or scarcely available on the Dutch labour market. Under the 30% ruling, there are various benefits including that 30% of the salary is tax free, no taxation on income from savings and investments and an easy exchange of the foreign driving license.

2. Conditions

  • You are recruited from abroad
  • You have lived outside a 150km radius from the Dutch borders
  • Your salary meets the salary norm
  • You work for a Dutch employer
  • The 30% ruling has been agreed to with the Dutch employer
  • You have been granted the 30% ruling by the tax authorities

1) You must be recruited from abroad. The 30% ruling is meant to attract foreign employees with specific skills that are not or hardly available on the Dutch labour market.

2) The employee has to transfer or be recruited from abroad to a Dutch employer.

a. Before you start your job, you have to live outside the Netherlands (note: exceptions may apply to employees with PhD and to employees eligible to the 30% ruling and who change employer )

b. Also you have to have lived outside a 150km radius from the Dutch borders in more than 16 months out of the 24 months prior to your employment in the Netherlands. The validity of this condition with EU law is currently still uncertain. Therefore, it is recommendable to file an application of the 30% ruling also when you do not meet the 150km condition.

3) You have specific experience or expertise that is not or is rarely available in the Netherlands. Scarcity is normally not tested (but it is tested for football players and dentists). The required specific expertise is determined solely on the basis of a salary norm. Your gross annual salary has to surpass a minimum limit (adjusted annually). In 2015, the taxable annual salary should be over €36,705. However, a lower taxable salary norm of €27,901 is applicable if you have completed a Master’s degree and are younger than 30 years old. Furthermore, for scientific researchers, employees working in scientific education or doctors in training, no minimum salary is required.

The salary norm is a hard condition and is, for instance, not adjusted when working part-time (although for pregnancy leave relief is granted). When one starts working during the year, annualisation of the salary can be considered when determining whether the salary norm is met.

4) Your employer must be registered as a Dutch wage tax withholding agent.

5) The employer and employee have to agree in writing that the 30% ruling is applicable. This agreement in writing can be done by means of a clause in your employment contract or as an addendum to the employment contract.

6) A joint application must be filed with the Dutch tax authorities by you and your employer.

7) Distance requirement – 150 kilometres. You must have lived more than 150 km from Dutch border before the work in the Netherlands commences.

3. Real life examples

1) If you graduate from a Dutch university and want to be effectively eligible for the 30% tax ruling, it is only possible if:

a. At the time of recruitment, you are not living in the Netherlands or working in the Netherlands (besides for educational or work experience purposes)

b. You have lived outside a 150km radius of the Dutch borders in more than 16 months in the past 24 months

c. Your duration period is not reduced to nil on the basis of the reduction rules (see further below)

d. Of course, you employer is willing to apply the 30% ruling for you

Please note that for PhD students at a Dutch university, who find a job within one year after their PhD, the first two conditions may be different or not applicable.

2) Whether you can get all the 30% benefit also depends on your salary level:

a. Suppose that you have a master degree and are under 30. You have a taxable annual salary of €35,000 (great, you are above the €27,901 threshold) and are eligible for the 30% tax ruling. The tax exemption amount is the lower of 1) €35,000*30%=€10,500 and 2) €35,000-€27,901=€7,091. Therefore the maximum tax free amount is €7,091, which is lower than the exact 30%. Then you only need to pay tax and national insurance premiums for the income of €35,000-€7,091=€27,901.

b. Similar example: suppose that you have a master degree and are under 30. You have a taxable annual salary of €45,000 (great, you are well above the €27,901 threshold) and are eligible for the 30% tax ruling. The tax exemption amount is the lower of 1) €45,000*30%=€13,500 and 2) €45,000-€27,901=€17,091, Therefore the maximum tax free amount is €13,500, which is exactly 30%. Then you only need to pay tax and national insurance premiums for the income of €45,000-€13,500=€31,500.

3) The salary norm may be annualized when the employment starts during the year. Also, when you become 30 you have to meet the normal salary norm from the next month on:

a. You start working per October 1, 2015 and are older than 30. Your taxable salary excluding 8% holiday allowance (since this is paid in May by your employer) is €9,100. Your annualized salary is €36,400 (12/3 x €9,100). This is below the salary norm, however, you can also consider the 8% holiday allowance (€2,912) and then the annualized income would be €39,312 which is sufficient to obtain the 30% ruling.

b. Per June 20, 2015 you become 30. Your salary for the whole year is €35,000. The salary norm for 2015 is calculated at 6/12 x €27,901+ 6/12 x €36,705=€32,303. Thus, the 30% ruling remains applicable when you become 30. But in 2016 your salary muts increase and meet the salary norm of that year, otherwise you loose the ruling forever.

4. Something you should be aware

Additional benefits

International school fees for children

If you have the 30% ruling, the so-called extra-territorial expenses cannot be paid tax free in addition to the 30% ruling. Examples of such costs are double housing, home leave tickets and international school fees. However, for international school fees an exception is made. These can be paid or reimbursed tax free by your employer in addition to the 30% ruling. If your employer do not want to pay for this, consider discussing a salary sacrifice scheme, i.e. you agree to a temporary salary reduction in return for a temporary tax free reimbursement of international school fees. This may also be beneficial to your employer (i.e. less social premiums due). Be aware to check with your employer if such salary sacrifice impacts your pension entitlements.


Your salary is € 100,000. After the 30% ruling your taxable salary is € 70,000. Your employer does not pay the international school fees to you. The costs are very high, i.e. € 30,000 for your two children. The employer would like to understand the impact for both the employee and employer if he would agree with a salary sacrifice scheme.

Current situation                                                    Situation after salary sacrifice

Salary (100%)                        € 100,000

Reduction salary sacrifice  (€  30,000)

Salary (100%)                        € 100,000                    Temporary salary                 €   70,000

Reduction 30%                     (€  30,000)                  Reduction 30%                     (€  21,000)

Taxable income                     €   70,000                    Taxable income                     €   49,000

Tax / national insurance      €   29,549                    Tax / national insurance      €   19,488

Levy rebate                           (€    2,753)                  Levy rebate                           (€   3,746)Balance                            €   26,796                    Balance                                    €   15,741

Employer social security     €     9,397                    Employer social security     €     8,859

The benefit for the employee is € 11,055 and for the employer € 538.

Driving license

If you are entitled to the 30% tax ruling (no matter whether you or your employer get the benefits), you (and your family members) can then transfer your driving license of your home country to the Netherlands, without the needs of taking another driving exam in the Netherlands. This can save a lot of your time and money.

Extra tax benefit

Under the 30% ruling you can elect for the ‘partial non-residence status’. You are then considered to be a non-resident tax payer in Box 2 and Box 3, even though you are living in the Netherlands. Therefore you do not pay income tax on assets in Boxes 2 and 3 (except for real estate located in the Netherlands and substantial shareholding in a Dutch resident BV). The election for partial non-residence is implicitely made by the way your tax return is filed.

How to apply

The 30% ruling application is a joint application. You and your employer should bith sign and file the application with the Dutch tax authorities. HRs from some companies may not know this rule and you need to educate them in this case.

When to apply

We suggest you discuss this with your employer as a part of your contract and include relevant clause in it. If not possible, you can also work with your employer on it after starting your work.

The 30% ruling becomes effective retroactively if the application is submitted within 4 months after starting your employment contract. If the application is submitted after 4 months, it will become effective as of the first day of the month following the application month – then you are losing some money.

You do not necessarily get all the benefits

Your employer is not obliged to pass on the advantage of the ruling to the employee. In practice the employer can partially or fully take the benefit. However, even if the employer takes all the benefits, you can still enjoy the additional benefits mentioned above.

Why tax-ruling

Why the Dutch government is generous? The idea of it is of course to attract those highly skilled people who can be rarely found in this country. And you receive a tax-free remuneration to cover the additional expenses incurred by living in the Netherlands.

Maximum duration of tax ruling

The maximum duration is 8 years. After that you will be treated as normal employees in the Netherlands. Please note that, when you have stayed or worked in the Netherlands in the 25 years prior to the Dutch employment, the duration period may be reduced due to the so-called reduction rules. There are some tresholds (e.g. max. 20 workdays and 6 weeks of stay per calendar year) that are allowed before any period is deducted from the 8 year period, but once a treshold is exceeded, each period is deducted from the 8 years (whilst periods shorter than one month are rounded up in months).


a. You have accepted a job in the Netherlands starting 1 January 2015. You have lived in the Netherlands for two years from January 1, 2001 up to and including December 31, 2002. After that you have worked 3 days each year in March from 2003 to 2014 plus you have visited friends each summer for two weeks. The treshold for the reduction rules have been exceeded. The reduction is 24 months (residence period) plus 12 months (3 days in March for 12 years) plus 12 months (two weeks in summer for 12 years), hence in total 48 months.

b. Same as above, but you have not lived in the Netherlands before. The tresholds are not exceeded. Therefore, there is no reduction at all.

Changing Jobs

If you change jobs you can reapply for the ruling, provided that you still meet the conditions regarding specific skills and you have signed the employmengt contract with your new employer within three months of terminating of the previous one.

Article credit to AangifteDirect


Patricia van Dam

+31 (0)20 820 8340