The 30% ruling is a Dutch tax benefit for international employees whereby up to 30% of their salary can be paid out tax-free. This ruling is intended as compensation for additional costs that expats incur when relocating to the Netherlands. Many questions arise due to the complex conditions, changing legislation, and the application process that affects both employers and employees.
Introduction: Why Are There So Many Questions About the 30% Ruling?
The 30% ruling raises many questions because it is one of the most complex tax regulations in the Netherlands. International employees and HR departments often struggle with the various conditions, changing legislation, and practical implementation.
The complexity arises from multiple factors. The ruling has specific salary thresholds that are adjusted annually, strict distance criteria, and requirements regarding scarce expertise. Additionally, important changes have recently been implemented that affect both new and existing applicants.
Much confusion also arises because the ruling contains both tax and immigration law aspects. Employers must often submit the application together with their international employees, which requires additional coordination.
What Exactly Is the 30% Ruling and Who Is It Intended For?
The 30 percent ruling is a tax benefit whereby international employees can receive up to 30% of their gross salary tax-free. This ruling is specifically designed to attract highly educated foreign specialists to the Netherlands.
The purpose of the ruling is to compensate for additional costs that expats incur during their relocation and work in the Netherlands. These costs include, among others:
- Application costs for residence permits and visas
- Hotel costs during the transition phase
- Travel and telephone costs to the home country
- Dutch language courses
- Additional housing costs
The ruling targets international employees with scarce expertise that is not or barely available in the Dutch labor market. It concerns highly educated professionals who are recruited from abroad for specific positions.
What Conditions Must You Meet for the 30% Ruling?
For the 30% ruling conditions, you must meet various criteria that together determine whether you qualify as an international employee with scarce expertise.
The main conditions are:
| Condition | Specification |
|---|---|
| Salary threshold 2025 | ā¬46,660 (after 30% deduction) |
| Under 30 with master’s degree | ā¬35,468 (after 30% deduction) |
| Distance criterion | More than 150 km from Dutch border |
| Residence period abroad | Minimum 16 of 24 months before employment |
You must demonstrably possess specific expertise that is scarce in the Dutch labor market. Scientific researchers at recognized Dutch research institutions are always eligible, regardless of their salary.
Additionally, you must have been recruited from abroad and may not have lived in the border region. This means you may not have lived in Belgium, Luxembourg, or parts of Germany, France, or the United Kingdom.
How Do You Apply for the 30% Ruling and What Are the Steps?
The 30% ruling application process requires cooperation between you and your employer. The application must be submitted jointly to the Tax Administration via a specific form.
The steps for a successful application are:
- Gather documentation: Valid identity documents, BSN number, employment contract, CV, and proof of residence abroad
- Employer declaration: Your employer must confirm in writing that your expertise is scarce and that they have not found a comparable candidate in the Dutch market
- Written agreement: Both parties must agree to the consequences of the ruling
- Submit application: Print the form and send it to the Tax Administration
Processing time varies from one to six months. If you apply within four months of employment, the ruling applies retroactively. For later applications, the ruling applies from the first day of the month after approval.
In case of rejection, you can file an objection within six weeks. Professional advice can help in complex situations or when you are unsure whether you meet all conditions.
What Are the Benefits and Limitations of the 30% Ruling?
The expat tax Netherlands benefits of the 30% ruling are significant, but there are also important limitations to consider.
The main benefits include:
- Up to 30% of your gross salary tax-free (maximum ā¬73,800 in 2025)
- Ability to exchange foreign driver’s license without driving test
- Allowance for international school costs for children
- Partial non-resident status for box 2 and 3 taxes (until 2025)
However, the limitations are also significant:
- Maximum duration of five years (for applications after 2019)
- Salary cap of ā¬233,000 per year (from 2024)
- Lower benefits in case of unemployment or disability
- Limited mortgage possibilities due to lower taxable income
- Lower pension accrual
From 2027, the percentage will be reduced to 27% for new applicants. If you are already using the ruling before 2024, you retain the full 30% percentage.
Conclusion: Key Points of Attention for the 30% Ruling
The 30% ruling frequently asked questions show that this ruling is complex but very valuable for international employees. The key points to remember are the strict conditions, timely application, and awareness of both benefits and limitations.
For expats, it is essential to check early whether you meet all criteria, especially the distance criterion and salary threshold. Employers must understand their role in the application process and the required documentation.
Given the complexity of the regulations and regular changes, professional advice is often indispensable. A global mobility compliance audit can help evaluate your situation and optimize your application.
Consider future changes in legislation and plan your financial situation carefully, especially since the ruling is temporary and affects benefits and pension accrual. For personalized guidance on your specific situation, please contact our expert team.
