Benefits of the 30%-Ruling
As an expat arriving in the Netherlands or planning your move, you may have already heard of the 30%-ruling. This beneficial tax measure is designed to make working in the Netherlands more attractive for skilled workers from abroad. In this article, we’ll explore what the 30%-ruling is, its numerous advantages for both employees and employers, and how our firm can support you in applying for it.
What is the 30%-Ruling?
The 30%-ruling is a tax exemption for employees moving to the Netherlands for work. Under this ruling, up to 30% of your gross salary can be paid as a tax-free allowance, significantly increasing your take-home pay. The tax-free allowance is intended to cover the extra costs of living in a foreign country—often referred to as “extraterritorial costs.”
Benefits for Employees
For expat employees, the 30%-ruling offers numerous advantages:
Higher Net Income: With up to 30% of your salary tax-free, you’ll enjoy a substantial increase in net income, making life in the Netherlands more affordable.
Simplified Financial Planning: The ruling eases the financial burden of relocating and adjusting to a new country, allowing you to focus on settling into your new role and environment.
Extraterritorial Costs Covered: Expenses like housing, international school fees, or travel back to your home country can often add up. The tax-free allowance effectively offsets these costs.
Access to Other Tax Benefits: In limited cases, employees benefiting from the 30%-ruling are also exempt from paying Dutch income tax until 2026 on certain assets.
Quick exchange of foreign driver’s license: a little know benefit of the 30%-ruling is that you are also allowed to simply exchange your foreign driver’s license for a Dutch driver’s license at the local municipality without having to take an otherwise lengthy driving test.
Benefits for Employers
Employers also reap the rewards of the 30%-ruling:
Attractive Recruitment Tool: Offering the 30%-ruling makes your organization more appealing to international talent, helping you secure skilled professionals.
Reduced Payroll Costs: Although employees receive a higher net income, employers do not incur additional costs. This ensures your compensation packages remain competitive without inflating your budget. In addition, employers can also save on certain income based employer taxes which actually benefits the bottom-line.
Simplified Administration: The tax-free allowance simplifies the process of reimbursing extraterritorial costs, providing clarity and efficiency for your payroll team.
Enhanced Retention: By offering financial incentives through the 30%-ruling, employers can improve employee satisfaction and retention.
Eligibility Criteria
To qualify for the 30%-ruling, employees must meet specific requirements:
Recruitment from Abroad: The employee must have been hired from outside the Netherlands.
Specialist Skills: The employee must have skills or expertise scarce in the Dutch labor market.
Minimum Salary: A minimum taxable salary must be met (indexed annually). Please see our blog for the most recent salary requirements.
Application Deadline: The ruling must be applied for within four months of starting employment in the Netherlands to ensure retroactive benefits.
Why Choose Us?
Navigating the complexities of the 30%-ruling can be challenging. That’s where our expertise comes in. Our team of tax and mobility specialists offers a comprehensive range of services to ensure your 30%-ruling application is seamless and successful. Here’s how we can help:
Assessment of Eligibility: We analyze your employment contract, role, and background to confirm your eligibility for the ruling.
Application Submission: Our team manages the entire application process with the Dutch tax authorities, ensuring all paperwork is complete accurate and timely filed.
Payroll Guidance: For employers, we provide hands-on advice to your HR and payroll teams to ensure the ruling is correctly implemented and maintained.
Continuous Support: We stay updated on legislative changes affecting the 30%-ruling and provide proactive guidance to help you adapt.
Take Advantage of the 30%-Ruling Today
The 30%-ruling is a valuable opportunity for expats and employers alike, offering financial relief and strategic advantages. Whether you’re an expat eager to maximize your income or an employer striving to attract top-tier talent, we’re here to help you unlock the full potential of this tax measure.
Contact us today to learn more about the 30%-ruling and how we can assist you in applying for it. Let’s make your transition to the Netherlands as smooth and rewarding as possible.
