Are you an expat coming to work in the Netherlands? Did you just receive a job offer from a Dutch employer which made you consider moving? If so, the Dutch 30% tax ruling might apply to you. Of course, the perk of not paying tax on 30% of your salary comes with multiple conditions that you need to meet. Read this page to get a better grasp on all you need to know about it.
The 30% Tax Ruling, Explained
The Dutch 30% ruling is a tax exemption that applies to people recruited by Dutch employers from outside of the Netherlands. Whether you are a highly-skilled migrant coming from a non-EU country or an EU national, you need to meet a number of conditions to get it. Simply put, this ruling allows you to claim up to 30% of your salary tax-free.
Why Is That Important?
The Netherlands is a country well known for the high taxes employees pay on their income. For years, Dutch employers have used the 30% facility to incentivise international workers to relocate in the Netherlands. However, in recent years, there have been changes to the ruling. Employees coming from abroad to work in the Netherlands who have applied for the tax exemption after January 1, 2019, will be eligible to receive it for a period of 5 years.
Who Is Eligible
Now that you know what it is, let’s see what conditions you need to meet as a foreign employee in order to apply for it and successfully claim your 30% tax exemption.
According to the Dutch Tax Authority website, you meet check off all of these boxes:
- You’ve moved here from outside the Netherlands to work for a Dutch employer
- You’ve been temporarily transferred to the Netherlands by your employer (also, known as secondment)
- You’ve lived at least 150 km away from the Dutch border in the last 16 months out of the 2 years preceding your first working day
- You have specific expertise, which is hard or impossible to find on the Dutch labour market
- The 70% part of your taxable salary exceeds €38,347.
- You’ve obtained a valid decision from the Dutch Tax Authorities (this is the confirmation you get after you have submitted your application, but more on that below)
How to Apply for the 30% Tax Ruling
Both you and your employer need to submit an application to the Dutch Tax Authorities (Belastingdienst). You can find the application form and instructions on how to complete it here.
Important: You should have it in writing that both parties agree to the 30% ruling.
If the company employing you does not have a legal entity in the Netherlands, they will be working with a third party that is a registered sponsor. Blue Lynx, for example, is a registered sponsor with the IND and can apply for the 30% ruling on behalf of your employer. We also offer contracting services on behalf of non-Dutch or non-IND registered employers – you can direct your employer to us for more information.
Once you complete the form, you will need to print it out and mail it to the Dutch Tax Authorities.
What Else to Consider
- The application process may take up to a few months.
- The tax-free part of your salary may not reach the full 30%.
- The 30% facility must be covered in the employment contract/agreement.
If you want to get a rough estimation of what you will be earning, try this Dutch Tax Calculator.
What if I Am a Foreign Student Who Has Completed a Master’s Degree in the Netherlands?
In order to qualify for the 30% tax ruling as a Master’s Degree student, you need to:
- Be under 30 years of age
- Have obtained your Master’s degree from a Dutch university or an equivalent degree in a country other than the Netherlands
- The non-taxable 70% of your wage exceeds € 29.149.
What if I am Conducting Scientific Research?
If you are relocating to the Netherlands to conduct scientific research for a Dutch institution, you are eligible to apply for the 30% tax return. How much you will be earning does not matter in this case, there is no taxable income threshold to reach and exceed.
What if You Are Dutch but Lived Your Whole Life Outside of the Netherlands?
As of January 1st 2012, if you have lived out of the country for 25 years, you are eligible for the 30% tax ruling, even if you are a Dutch national.
What if You Open Your Own Company or Go Freelance?
By definition, this financial incentive for highly skilled migrants only applies to them if they are employed by a company. However, there are some ways around it. If you register your company as a Besloten Vennootschap (B.V.), i.e. a private limited company and list yourself as an employee on its payroll, you may apply for the 30% tax ruling. However, the Dutch Tax Authorities may still not issue a ‘valid decision’ for your case.
Get Professional Advice
If you need some help manoeuvring your way around tax returns or need additional accounting advice, we recommend you turn to the tax specialists at Smit en de Wolf. Have Blue Lynx in mind if you need a business consultation in regards to the 30% facility. Schedule a consultation with us by emailing us at firstname.lastname@example.org.