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. 

In 2024, substantial changes will be made to the rules regarding 30% Tax Ruling. From 1 Jan 2024 the 30% Ruling will work  as follows: 

30% during the first 20 months of employment, 

20% during the 21-40 months of employment, and 

10% during the final 20 months of employment.

What does the 30% ruling actually mean to you?

So, what will this mean to you? For example, an employee earning €100,000 annually under the previous rules would have received a tax-free allowance equivalent to 150% of their yearly salary over five years (5x 30%), with the rest subject to standard taxation. This amounts to €150,000 tax-free over five years. 

Under the revised rules, the employee would only receive a tax-free allowance equivalent to their annual salary over five years (5/3 x 30% + 5/3 x 20% + 5/3 x 10%), translating to €100,000 of tax-free allowance over five years. This represents a difference of €50,000, or half a year’s salary over the course of five years.

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).