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A Comprehensive Guide to the Dutch 30% Ruling for Expatriates

Dutch 30% Ruling for Expatriates

What is the 30% Ruling (referred to as the “30% facility”)

The 30% Ruling stands as a tax framework applicable to expatriates in the Netherlands, strategically designed to streamline the recruitment of foreign employees possessing specialized skills or expertise.

Operating within the contours of the 30% Ruling, employers have the liberty to provide a tax-free portion (equivalent to thirty percent) of their employee’s salary.

Fundamentally, the essence of the 30% Ruling lies in its capacity to enable employees to receive a heightened net salary, all while not imposing any additional costs on their employers.

Aside from the standard responsibilities linked with payroll processing, the employer does not shoulder any further obligations or liabilities.

The tax-free allocation is primarily intended to encompass extraterritorial expenses (regardless of the quantifiable value of such expenses), which encompass costs arising from an employee’s work location differing from their native country.

Neither the employer nor the employee are obligated to substantiate the existence of these extraterritorial costs to avail the tax-free allocation.

Eligibility for the 30% Ruling may be granted by Dutch tax authorities to foreign employees who are enlisted (or engaged) from overseas by a Dutch entity or branch, provided they meet specific supplementary criteria (outlined below).

It is important to recognize that a mere relocation to the Netherlands in the capacity of a self-employed individual, without affiliation to a Dutch entity or branch, does not suffice for leveraging the benefits of the 30% Ruling, as the mechanism is exclusively applicable through Dutch payroll systems and not via the submission of a Dutch tax return.

Furthermore, it’s noteworthy that once granted, the 30% Ruling extends its influence over all forms of remuneration from ongoing employment (including, but not limited to, bonuses, equity incentives, and personal use of company vehicles), though it does not encompass severance payments.

A significant supplementary advantage linked with the 30% Ruling lies in the employee’s discretion to be treated as a non-resident Dutch taxpayer for income arising from substantial interests (ownership of 5% or more in a company) and earnings stemming from savings and investments.

This facet implies that any other forms of non-employment income originating beyond the Netherlands (such as rental income from overseas properties) remain exempt from taxation within the Netherlands.

Qualification Criteria for the 30% Ruling

The key conditions for eligibility concerning the 30% facility encompass:

Recruitment from Overseas

The employee must be enlisted from abroad or assigned to the Netherlands from a foreign location.

Directors of Dutch companies who are not residents may also potentially meet the requirements for this benefit.

Distance from Dutch Border

Preceding the employee’s engagement or assignment to the Netherlands, they should have resided a minimum of 150 km away from the Dutch border for at least 16 out of 24 months.

However, this criterion does not apply to PhD students who have earned or are earning their degree within the Netherlands (or within the 150-kilometer radius) and have embarked on their employment within a year of graduating.

Salary Standards

The employee’s taxable employment income must reach a minimum of €38,961 (this threshold was €38,347 in 2020 and €37,743 in 2019).

Alternatively, if the individual is under 30 years of age and holds a Dutch master’s degree (from a university or its foreign equivalent), the minimum required salary stands at €29,616 (this threshold was €29,149 in 2020 and €28,690 in 2019).

Distinct Expertise

Employees are required to possess specialized knowledge or expertise that is scarce within the Dutch labor market.

Meeting the aforementioned salary thresholds is regarded as fulfilling the distinct expertise prerequisite.

Moreover, employees should consistently meet the specific expertise requirement.

In essence, the salary criterion must be upheld throughout the entire duration for which the 30% facility is granted.

Should the salary benchmark not be met at any given point, the 30% facility will immediately lose its validity (even if previously granted) and cease to be applicable for that year, with retroactive effect. Subsequent utilization of the facility will be precluded.

Written Agreement Between Employer and Employee

The utilization of the 30% ruling necessitates a mutual agreement documented in the employment contract or as an addendum to it. This agreement should then be presented as a combined petition by either the employer or, jointly, on behalf of both the employer and the employee.

Duration of the 30% Ruling Applicability

The scope of the 30% ruling can extend up to a maximum period of 5 years or 60 months.

In a prior decision, the Dutch Government had curtailed the maximum duration from 8 to 5 years starting from January 1, 2019.

However, following a series of consultations, adjustments have been made. For 30% facilities with original end dates falling between 2021 and 2023, the revised culmination date for the prior 8-year span was established as December 31, 2020.

For 30% rulings that initially concluded in 2024 or beyond, the revised termination date is 3 years less than the original end date.

30% rulings with original conclusions set in 2019 or 2020 remained unaffected, still retaining an 8-year maximum span.

It’s important to consider that any instances of prior work or stays in the Netherlands exceeding 20 days in each calendar year within the last 25 years will be subtracted from the maximum application period.

Additionally, periods of prior stays in the Netherlands due to personal circumstances will not diminish the duration of the 30%-facility if they fit within these parameters:

(a) No more than six weeks in each calendar year; and/or (b) A single continuous stay of 3 months.

To secure retroactive effectiveness from the employment’s commencement date, the 30% ruling must be applied for within 4 months after starting the job.

Submitting an application later can still yield success, but the commencement date of the 30% ruling will be adjusted to the first day of the subsequent month after the application, with deductions from the maximum application period.

Should an employee transition to a new job and both they and their new employer desire to continue the 30% ruling, a fresh request must be filed for the new employment.

The time gap between the previous employment’s conclusion and the commencement of the new employment should not surpass 3 months.

Step-by-Step Process for 30% Ruling Application

The application for the 30% ruling must be presented in written form, employing a paper application form (accessible through the link provided in this article), and then forwarded to the Belastingdienst, which is the Dutch Tax Office.

The application needs to be supplemented with accompanying documentation (refer to the checklist of documents below for guidance on what should be included).

Ideally, a comprehensive application should encompass all necessary information and documents in one go. This approach streamlines the application procedure and enhances the likelihood of a prompt and favorable decision.

However, circumstances might occasionally necessitate the submission of an incomplete application in order to meet the designated deadline.

Timelines and Deadlines for the 30% Ruling Process

The initial application must be submitted within 4 months from the commencement of the employment for which the application is being made. This ensures retroactive applicability from the employment’s start date.

Typically, the processing period spans between 8 and 12 weeks following the submission of a complete application to the Dutch tax authorities.

Even an incomplete application remains valid in terms of fulfilling the deadline requirement.

Consequently, if not all essential information is available within 4 months after the commencement of employment, an incomplete application can still be submitted to preserve the deadline. The Dutch tax authorities will then request any missing details and allow additional time for their provision, thereby extending their decision timeline.

In anticipation of a positive outcome, the 30% ruling might be applied to the payroll prior to formal approval. However, if a subsequent denial occurs, adjustments must be made to the payroll, and the previously tax-free cost allowance becomes taxable.

Checklist of Documents to Support the 30% Ruling Application

  • Employee’s curriculum vitae or resume
  • Copy of the employee’s passport (page containing personal details and signature)
  • Copy of the employment agreement or assignment letter
  • Copy of the job description
  • Employee’s address information (including prior stays in the Netherlands, if applicable)
  • BSN(Burgerservicenummer) number
  • Proof of residence abroad (copies of utility bills, municipal register excerpts, etc.) covering at least the 24 months before arriving in the Netherlands, preferably including monthly bank statements with cash withdrawals or card payments
  • Employee’s residence or work permit
  • Employer’s Dutch company particulars (including industry sector code) and wage tax number
  • Previous 30% ruling decisions, if applicable
  • Power of Attorney documents for both the employer and employee (if the application is made on their behalf), bearing handwritten signatures since digital signatures are currently not accepted for this type of documentation
  • Addendum to the employment agreement addressing the 30% ruling (if the agreement doesn’t already sufficiently cover the 30% facility requirement)

Examples of 30% Ruling Application

Example 1

An employee with a salary of €150,000 fulfills all the necessary conditions for the complete 30% ruling. Applying the ruling to their payroll results in a taxable salary of €105,000, allowing for a tax-free allowance of €45,000.

Example 2

Another employee earning €55,000 could potentially have the full 30% ruling applied to their payroll, making their taxable salary €38,500. However, since this is below the mandatory salary threshold, only a partial benefit of up to €16,039 (€55,000 – €38,961, the minimum salary requirement for 2021) would be allowed.

Self-Application Process for the 30% Ruling

Directly applying for the 30% ruling yourself is a viable option, and instances of successful applications by both employers and employees are not uncommon.

The prerequisites and documentation requirements remain unchanged.

However, exercising this option warrants careful consideration, as the application could face rejection if the Dutch tax authorities review the employment contract and find it lacking the necessary compliant language.

While not all components of the application and supporting documents might be scrutinized in full during the process, a later audit on the Dutch employer could reveal non-compliance with 30% ruling criteria, leading to retroactive denial.

For those who choose to proceed with a joint application, the 30% ruling application form should be completed and submitted to the provided address (link provided).

Sending the complete application and supporting documents by recorded delivery, which includes delivery confirmation, is advisable.

Upon receipt, the Dutch tax authorities will issue a confirmation letter. Within 8-12 weeks, they will either:

Request additional information Reject the 30% ruling Grant the 30% facility

In case of missing documents prompting the Belastingdienst’s request for additional information, provide the necessary documentation promptly.

If specific technical questions arise, engaging an expert professional in 30% ruling applications might be prudent.

If denied, an objection can be filed within 6 weeks.

If the objection is unsuccessful and the 30% ruling had been applied to the payroll, adjustments will be required. The previously enjoyed 30% tax-free allowance might need to be reimbursed, either as a lump-sum payment or distributed over subsequent payrolls.

Confirmation of 30% Ruling Approval

Upon approval, review the confirmation letter for accuracy (company wage tax number, BSN number, ruling duration, etc.). Any discrepancies should be reported within 6 weeks.

Once details match those in the application, the 30% ruling can be implemented in the monthly payroll.

If the 30% ruling had been anticipated, no adjustment is necessary. However, if the ruling wasn’t applied previously, a retroactive application to the start date can lead to a one-time salary recalculation and a refund.

Annually, the Belastingdienst reviews the 30% ruling. Ensure all relevant information is up-to-date and accurate by the year-end.


The bedrock for calculating the 30% tax-free allowance is regular employment income from one's ongoing job. While pension premium regulations have their unique provisions, facets like bonuses, holiday allowances, benefits, and company cars fall squarely within the realm of the 30% ruling.


It's important to note that severance payments deviate from the definition of regular employment income, hence disqualifying them from the 30% tax-free allowance. In instances of redundancy, a detailed assessment of the redundancy package is vital to distinguish between bonus-related disbursements, accrued holiday allowances, and authentic severance payments.


Equity-based earnings, encompassing stock options, RSUs, and share incentives, abide by the overarching principle that the foundation for the 30% ruling resides in income sourced from ongoing employment within the applicable timeframe.


It's generally not within the scope of the 30% ruling to address salaries that become taxable after the cessation of employment.


This implies that, on the surface, applying the 30% ruling to stock options becoming taxable post-employment termination might not be feasible.


However, if such earnings become taxable in the month following the termination month, the 30% ruling could still be applicable, provided it falls within the granted duration period.


Consequently, it's often advantageous to exercise stock options either prior to or immediately after employment termination to fully utilize the 30% ruling benefits for this income type.

No, there's no mandatory requirement for employers to submit a joint application with their employees.

If you're employed in the Netherlands and have received approval for the 30% ruling, you can retain the benefits while venturing into entrepreneurship.


The recommended approach involves establishing a B.V. business entity that compensates you with an employee salary.


Subsequently, the B.V. can proceed to submit a 30% ruling application on your behalf.


This application must be filed within three months of the employment transition, and the employment contract should encompass the appropriate language essential for a successful 30% ruling application.

Even if you're hiring an individual within the Netherlands, it's still feasible to successfully apply for the 30% ruling.

Employees recruited within the Netherlands can indeed qualify for the 30% ruling, provided they meet specific conditions. They need to showcase either a relocation from abroad to the Netherlands for their role or, if they're already employed within the Netherlands by another company, their eligibility for the 30% ruling in the new employment. While there are additional nuances to consider, having an individual already in the Netherlands doesn't automatically disqualify them from availing the 30% ruling benefits.

At present, there are no imposed limits or caps on the 30% tax-free allowance. This implies that even for substantial salaries, such as €100 million, individuals granted the 30% facility would retain a taxable salary of €70 million, while enjoying a tax-free allowance of €30 million.

Obtaining the 30% ruling for a new employment scenario is entirely possible, as this aligns with the 30% ruling's provisions for changing employers.

However, a formal application is necessary to allow Dutch tax authorities to assess the continuation of the 30% ruling with the new employer. The established eligibility criteria remain applicable, and it's important to ensure that the gap between the previous employment's conclusion and the commencement of the new employment does not exceed three months.

Certain employee categories, such as scientific researchers, those engaged in scientific education, or doctors in training, are exempt from the minimum salary requirements of the 30% ruling. It's important to note that restrictions exist regarding the companies or institutions these employees can work for, despite the lack of a minimum salary prerequisite.

If you missed the opportunity to apply for the 30% ruling despite being eligible (perhaps due to non-submission or employer choice), there might still be a chance for a retrospective application.


Even if you've foregone a year or two of the 30% facility benefits, pursuing the ruling can be advantageous.


The Belastingdienst, or Dutch tax authorities, could potentially adjust the ruling's total duration by the time you've already spent in the Netherlands.

The 30% ruling doesn't inherently discriminate against Dutch nationals.


What matters most is that the individual has resided outside the Netherlands for a substantial period. This ensures that any prior work or stay periods in the Netherlands, which could otherwise curtail the maximum period of the 30% ruling, are disregarded.


Work or stay periods within the Netherlands in the 25 years leading up to one's arrival for a new role in Holland must be subtracted from the maximum applicability period (5 years / 60 months).


Exceptions do exist, as outlined by this rule. For instance, brief visits for holiday, family matters, and limited work days within the Netherlands can be excluded from the calculation.

The prerequisites of the 30% ruling extend beyond expatriates.


Individuals need not bear the expat status to meet the requirements of the 30% ruling.


Even local hires operating under a standard Dutch employment contract could potentially qualify for the 30% facility.

The Dutch tax authorities have provided clarity on this matter. They take into account an employee's income from their ongoing employment.

This signifies that individuals receiving a divided salary, with a portion originating from the Netherlands and another from a foreign location, will have their global income considered in totality for meeting the minimum salary threshold required to qualify for the 30% facility.

For individuals engaged in part-time work, specific regulations are absent. Therefore, it's prudent to presume that the standard threshold applied to full-time workers remains relevant for assessing eligibility in the context of the 30% ruling.


Special Provisions for Employees on Parental Leave


Indeed, there are distinct provisions in place for employees on parental leave.

At RemotePad, Lech draws on his professional experience to write about employment taxes and payroll (both remote, and in-office). Lech holds a Bachelors’ degree from the University of Kent, a Master of Arts (MA) from Kings College London, and professional payroll and tax qualifications. He has 20 years experience advising on all manner of tax and business planning matters.