What is the 30% ruling?
Employers can give a tax-free allowance to overseas highly skilled employees for the extra costs involved in their stay in the Netherlands. The 30% ruling is set up and processed through the employer’s payroll and is valid for a maximum of 5 years. The percentage of tax-free allowance is reduced over the term;
- Maximum 30% during the first 20 months
- Maximum 20% during the next 20 months
- Maximum 10% during the last 20 months
What are the Qualifying Conditions and Salary Requirements?
- Be in paid employment
- Have a specific expertise that is hardly found on the Dutch labour market, this is annual salary greater than 46,107 EUR in 2024
- Those who have a master’s degree and are younger than 30, taxable annual salary should be greater than 35,048 EUR
- Be recruited from outside the Netherlands
- Possess a valid decision
What are the Exceptions?
- For academic employees with a Dutch master title or an equivalent title abroad, who are younger than 30, the income standard is 41,954 EUR exclusive of the exemption
- There are no income requirements for employees who carry out scientific research at specific institutions and physicians training to become specialists
- Those who have lived more than 150 Km from the Dutch border for more than 16 months in the 24-month period prior to their first working day in the Netherlands. Those from Belgium, Luxembourg, Northern France or large parts of Germany and a small part of the United Kingdom do not qualify
How are Employees Assessed?
The Dutch tax office will assess the employee based on the following;
- Level of education
- Experience of relevance to the position (more than 2.5 years working experience in a comparable position)
- The remuneration level for the position in the Netherlands and the employee’s country of origin
- Ensure the take home salary in the employee’s country of origin is not lower than the position in the Netherlands
- Reimbursements for extra costs that are excluded
What are the Limitations?
Limitation do not apply from 1 January 2012 for employees who come from regions along the Dutch borders and meet the following 3 conditions:
- The employee has previously worked in the Netherlands and following a stay outside the Netherlands, has returned to work in the Netherlands 8 years prior to the original date they worked in the Netherlands
- The employee has lived further than 150km from the Dutch border for more than 16 months in the 24-month period prior to the first working day in the Netherlands
- During this prior working period, the employee was subject to a decision for the 30%-facility. If there was no decision, the employee can argue that they met the conditions for the 30% facility applicable at the time
- If the employee changes employer during the 5-year term they must fill out the form, but the new employer does not need to request a new decision
How to Apply
The 30% facility form must be filled out in full by the employer and signed by the employee. If the application is received later, actual tax-free extraterritorial costs may only be reimbursed from the effective date of the decision. If the facility is to be used from the 1st working day: The application must be received within 4 months of that date. Gather the following documents;
- Employment Contract
- CV or printed version of a LinkedIn page
- A summary of all the days the employee was physically present in the Netherlands in the last 25 years (if applicable)
- Bank statement, utility bill & passport (including stamps in passport)
Print and send the form along with the supporting documents to: Belastingdienst/Kennis- en Expertisecentrum Buitenland, Postbus 2865, 6401 DJ Heerlen, The Netherlands. The documents must be sent by recorded delivery with a tracking number present. Retain the receipt as proof of postage. Check the employees’ country is under “Countries suitable for exchange“
How to Track the Application
- Tax information line for non-residents (from abroad):+31 555 385 385
- Calling from the Netherlands: (055) 5 385 385
Lines are open Monday up to and including Thursday: 08.00 – 20.00 . Friday: 08.00 – 17.00
30% Ruling & Driving Licenses
As a benefit of the 30% ruling application, employees can exchange their driving license (from any country) if driving is required in the Netherlands.
- The original driving license must be valid and not expire and related to the insurance policy if a road accident occurs
- Employees must be registered in the Basisregistratie Personen (BRP) Personal records database
- Have a valid ID or residence permit
- The driving license is issued in a member country of the EU, or that is in the European Free Trade Association (EFTA) or in a country that has signed an agreement with the Netherlands
If the employee’s country is not under a suitable country to exchange, a license exchange is still possible if they are going to work in the Netherlands or if they are a highly skilled worker. However, a license from a country that is not a member of the EU/EFTA, can only be exchanged if the employee has lived in the issuing country for at least 185 days in the year in which the driving license was issued. As a last resort, If the license still cannot be exchanged, employees will need to take a Dutch theory and a practical test to obtain a Dutch License.
What are the Required Documents to Exchange the License?
- A 35mm * 45mm colour passport photo
- Foreign driving license (translated by a certified translator, the Embassy or the Consulate)
- 30% evidence decision from the Tax and Customs Administration
Employees may require a health certificate from the Central Office for Motor Vehicle Driver Testing (CBR). If required, apply for the health certificate by visiting to the CBR website. Select “Fill in the driver’s license health declaration” under the “Arrange Directly” menu.
Visiting the Municipality
Employees must submit all documents in person at the municipality where they are registered. A confirmation letter will be sent within 15 days. The Dutch driving license must then be collected at the town hall. Employees can still drive whilst the application us underway, if the police stop them, supply evidence that the application is being processed.
