30% RULING
The 30% ruling is a Dutch tax facility aiming at attracting foreign employees with specific skills or expertise to work in the Netherlands. On this page you will find a brief overview of the 30% ruling including the conditions, the application procedure and two fictional examples.
Would you like to know whether the 30% ruling is applicable for you or your employees? Use the contact form at the bottom of this page or read our eMagazine!
GENERAL
The 30% ruling provides a tax free allowance (30% allowance) which is deemed to cover all so-called extraterritorial costs. Extraterritorial costs are defined as the extra costs for staying outside of the country of origin.
Application of the 30% ruling gives rise to a substantial increase in net salary for the employee and substantial reduction of employer’s costs.
Tax free allowance
Which extraterritorial costs can be covered with this ruling?» traveling costs of home leave
» extra costs of living
» double housing
» finding suitable housing and schools of children
» residence permit applications and changing of official documents (work permits excluded)
» language courses
CONDITIONS
DURATION
SALARY NORM
APPLICATION PROCEDURE
EXAMPLE 1
Without 30% ruling (EUR) | With 30% ruling (EUR) | |
---|---|---|
Gross salary | 45,000 | 45,000 |
30% allowance | 0 _____ |
5,532 _____ |
Taxable income | 45,000 | 39,468 |
Subtract: tax / social security | 16,682 | 14,631 |
Add: 30% allowance | 0 _____ |
5,532 _____ |
Net salary | 28,318 | 30,369 |
In this example, the 30% allowance amounts to € 5,532. This is less than 30% of the salary. If the 30% allowance would be higher, the salary (excluding the 30% allowance) would not meet the salary norm of higher than € 39,467.
This example shows that the benefit of the 30% ruling is € 2,051 (€ 30,369 – € 28,318).
EXAMPLE 2
Without 30% ruling (EUR) | With 30% ruling (EUR) | |
---|---|---|
Gross salary | 60,000 | 60,000 |
30% allowance | 0 _____ |
18,000 _____ |
Taxable income | 60,000 | 42,000 |
Subtract: tax / social security | 22,242 | 15,569 |
Add: 30% allowance | 0 _____ |
18,000 _____ |
Net salary | 37,758 | 44,431 |
In this example, the 30% allowance amounts to € 18,000. This is 30% of the salary. This example shows that the benefit of the 30% ruling is € 6,673 (€ 44,431 – € 37,758).
MORE INFORMATION?
Would you like to know more about the 30% ruling? Fill out the below contact form to get in contact with our 30% ruling team.