The 30% ruling is a tax facility for expats who are working in the Netherlands. Expats are often faced with extra costs (extraterritorial costs), such as housing costs. If all conditions are met, the employer is allowed to grant a tax free allowance, which is considered as a compensation for the extraterritorial expenses. This tax free allowance is set at 30% of the salary which is subject to Dutch payroll tax. This is known as the 30% ruling or the 30% facility.
The 30% ruling can be obtained if the following conditions are met:
- there is an employment relationship (employer – employee);
- the employee is recruited from abroad or is seconded from abroad. The employee lived in another country than the Netherlands before, i.e. the employee lived more than 150 kilometers from the Dutch border; and
- the employee has a specific expertise that is not / barely available on the Dutch employment market.
Exceptions to the conditions mentioned above could apply, in particular for PhD employees. Under specific circumstances it is also possible to apply for the 30% ruling if you start a business in the Netherlands. Feel free to contact us to discuss the application procedure or if you have any other questions.