The 30% ruling allows employers to grant certain employees with special skills or expertise scarce or absent from the Netherlands job market a tax-free allowance of 30% of their salary (as far as it exceeds the minimum taxable salary criterion given below). The employee must have been be hired from abroad.
- For 2017 the minimum required income is € 37000 for employees of 30 years and older.
- For employees younger than 30 and holding a master title the minimum required income is € 28125.
- For scientific researchers there is no income requirement.
This allowance is meant to compensate for extra expenses incurred during a temporary stay outside the country of origin (extra-territorial costs). The ruling is only applicable for a maximum period of 8 years, and will be reduced with possible periods of earlier presence in the Netherlands.
This ruling has certain consequences in terms of pension and social security. Employees who are granted the 30% ruling can in principle only accumulate pension on the remaining part of their salary. However under certain conditions it is possible to accumulate pension on the 30% allowance too. Social security rights and premiums may also be affected. Premiums and social security rights will only be based on salary excluding the 30% allowance.
The 30% ruling is only applicable if the Tax Administration Authority (Belastingdienst) has confirmed the approval. The employer and employee need to file a joint request with a qualifying tax adviser or the Dutch tax authorities to apply for the ruling. The request for the 30% ruling must be filed within 4 months of the start of employment. Requests that have not been filed within 4 months, will not have a retroactive effect from the start date of the employment. They will only be granted as of the month following the date of the request.
For 2017 this form can be used to apply for the 30% ruling. Make sure both the employer and the foreign employee sign the application.
Additional information by our Partner LIMES international.