30% Tax Ruling
What is the 30% ruling?
The 30% reimbursement ruling (also known as the 30% facility) is a tax advantage for highly skilled migrants moving to the Netherlands for a specific employment role. When the necessary conditions are met, the employer can grant a tax-free allowance equivalent to 30% of the gross salary subject to Dutch payroll tax. This reimbursement is intended as compensation for the extra costs that international employees can incur when moving to a new country for their work.
What does the 30% ruling actually mean to you?
From a tax perspective, the salary agreed upon between the employee and employer may be reduced by 30%. In return, the employee should receive a 30% tax reduction. This is the most common way it is applied as it does not influence the salary burden for the employer. In effect, it is equivalent to having a maximum tax rate of approximately 36.2%.
How long do I receive the 30% ruling for?
Employees applying for the 30% ruling after 1 January 2019 receive the benefit for 5 years.
How do I apply for the 30% ruling?
Typically, the employer is responsible for applying for the 30% ruling on behalf of the employee. This can be done directly with the Dutch Tax Office (Belastingdienst).