THE 30% TAX RULING IN THE NETHERLANDS
The 30% ruling is a tax ruling for expats who were hired from abroad for a position in the Netherlands. If a number of conditions are met, you will only be subject to tax on 70% of your salary, the remaining 30% will be paid out tax free as compensation for expenses you may incur by working outside your home country.
HOW TO APPLY FOR THE 30% TAX RULING?
Broadstreet is specialized in providing financial services for expats. Our advisors know exactly how to help you with all your questions about the 30% tax ruling. Our tax experts will be happy to take care of the complete application process for you from our easy to reach office in Central Amsterdam.
DURATION OF THE 30% RULING
The 30% ruling will be valid for 8 years, if granted. Any time spent in the Netherlands previously, will be reduced from the period of 8 years. However, the Dutch government has announced they intend to reduce the maximum duration to 5 years, effective as of the first of January 2019. The impact for those who are currently benefiting the 30% ruling, is not clear yet.
REQUIREMENTS FOR THE 30% TAX RULING
- The employee works for an employer who is registered with the Dutch tax office and pays payroll tax;
- Employer and employee must agree in writing that the 30% tax ruling is applicable;
- The employee must be transferred from abroad or must be recruited abroad;
- The employee did not reside within 150km from the Dutch border for the last 18 out of 24 months at the time of hiring;
- The employee’s salary is at least EUR 37.743 per annum;
- The employee needs to have expertise that is scarcely available in the Netherlands.
SALARY REQUIREMENT FOR THE 30% RULING AS PER JANUARY 2020
The minimum salary requirements for the 30% ruling as per January 2020 are:
- € 38,347 (2019: € 37,743)
- For an employee younger than 30 years with a qualified master degree: € 29,149 (2019: € 28,690)
FREQUENTLY ASKED QUESTIONS ABOUT THE 30% RULING
The 30% ruling is a hot topic among expats. Every expat has heard about it, but yet only a few know what it actually entails. At Broadstreet, we receive questions about this subject on a daily basis. We have gathered the most frequently asked questions we have had the past couple of months.
Is the 30%-ruling only applicable when the gross salary is more than € 53,000?
No. The salary requirement under the 30%-ruling is a minimum taxable wages of € 37,000. As long as your taxable salary is more than € 37,000, the ruling is applicable on income exceeding € 37,000, with a maximum of 30% of the taxable income of course.
I benefit from the 30% ruling but I want to work for a different company. Can I still benefit from the 30% ruling?
Yes, you can switch employers and continue the 30%-ruling on your new employment. You and your new employer will need to submit a new application for the 30%-ruling. The gap between your previous job and the new one cannot be more than 3 months.
I meet all the conditions for the 30%-ruling but my employer is not willing to submit the application. Can I submit the application myself??
No, unfortunately not. The employer and the employee need to apply jointly. If the employer does not want to apply for the 30%-ruling, the employee is not entitled to receive this benefit.
Can I apply for the 30%-ruling if I was a student in the Netherlands?
It depends whether or not you were considered as a Dutch resident during your studies. If you came to the Netherlands only for your studies and the center of your social and economic life was outside the Netherlands, then you may not be considered Dutch resident. In this situation you may be eligible for the 30%-ruling if you meet the other requirements for the 30%-ruling.
If you came to the Netherlands for a PhD, and have secured a job after finishing the PhD, you will also be considered as being hired from outside.
Can I apply for the 30%-ruling if I have lived in the Netherlands before?
Yes, that is possible. The years spent in the Netherlands will be deducted from the maximum duration of the 30%-ruling (8 years). For example if you have lived in the Netherlands for 3 years before, and you come back to the Netherlands again, you will be eligible for the 30%-ruling for 5 more years.
Can my partner benefit from the 30%-ruling?
Your partner cannot benefit from the 30% ruling on income. However, under the 30% ruling you are exempt for box 3 ( tax on your savings and investments). If you and your partner are fiscal partners, your partner can allocate his/her savings to you and then these savings are not taxed either.
I already start working for a company in the Netherlands a while ago and only found out recently about the 30% ruling. Can I still apply for the 30%-ruling?
Yes, that is possible. The 30%-ruling needs to be submitted within 4 months after the commencement date of your contract in order to receive the ruling retroactively. If the 4 months period has passed, you can still apply for the 30% ruling, but the commencement date will then be the month following the submission date.
What happens if the 30%-ruling was applied incorrectly?
At the end of the year the tax authorities will check if the employee has met all the requirements. If it turns out that for example the minimum salary requirement was not met, the 30%-ruling was applied incorrectly. As a consequence, the employer will face an additional tax assessment payroll tax. The employer is allowed to pass on the costs to the employee.