The 30% ruling is a tax advantage for incoming employees who come to work in the Netherlands and who have special expertise which is scarce on the Dutch labour market. An incoming employee is an employee who is recruited from abroad or who is transfered to the Netherlands by a foreign employer. This means that if a job is found after arrival in the Netherlands, the 30% ruling won’t be granted, nor will it be granted in case of self employment.
The tax advantage consists of a tax free allowance of maximum 30% of the salary. The remaining 70% will be taxed based on the standard tax brackets. The tax free allowance is supposed to cover the extra territorial costs which the employee faces due to the international assignment.
The required special expertise is determined on the basis of a salary requirement. If the employee is paid a salary above a certain amount the employee is assumed to have the required expertise. For young masters a reduced required salary is applicable. You can find the salary amounts on our website.
Besides the salary the employee must also satisfy the 150 km condition. This means that the employee must have lived at a distance of at least 150 km from Dutch border during at least 16 of the last 24 months before coming to work in the Netherlands.
The 30% ruling can be granted for a maximum of 8 years. This term will be reduced with the periods of previous stay in the Netherlands unless these periods ended more than 25 years ago.
If the employee has the 30% ruling and changes employer it is possible to transfer the ruling to the new employer.
To get the 30% ruling or to have it transferred to a new employer an application will have to be filed.