The 30% Ruling – an Introduction

If the famous saying that “the best things in life are free, plus tax, of course,” is true, then the 30% ruling enacted by the Dutch Tax Authorities perfectly fit this description. At 52%
on income exceeding the € 67,000 (2016: € 66,000) mark, The Netherlands have an unusually high tax rate and one of the highest in the world, which goes to fund excellent medical and social plans. Expectedly, the high tax is enough to dissuade many professionals from wanting to work in The Netherlands, because the mere thought of having more than half of their salary deducted as a tax is terrifying! Therefore, the Dutch tax authorities enacted a tax ruling specifically meant to attract highly skilled employees to The Netherlands: The 30% ruling!

Benefits

The 30% ruling is unarguably one of the most efficient Dutch tax planning tool accessible to employees with some tax remunerations. They stand to enjoy the following advantages for the first 8 years of their stay in The Netherlands

  • They are to receive 30% of their salary as a tax-free reimbursement, which reduces the tax rate on their wages to 36.4% in real terms (70% of 52%);
  • They can also enjoy a tax-free reimbursement from their employer to fund international school fees of their children;
  • The 30% ruling allows them to opt for the Partial Non-Resident Taxpayer Status on their tax form with all the benefits that accompany it;
  • It allows them to exchange their foreign driver’s licence for a Dutch drivers’ licence, which in most cases might warrant the need to retake the driving test to obtain one.
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News

November 8, 2016: We updated our tax calculator with the 30% ruling income requirements check.
November 3, 2016: 2 Amendments regarding the 30% ruling have been proposed to be included in the Belastingplan 2017. The first amendment is to cancel the 30% ruling per January 1, 2017 and the second amendment is to cap  the 30% ruling at an income of 178.000.

So far only a quickscan to see if the amendments can be implemented by January 1, 2017 have been made. Capping the 30% ruling is not an option.

November 3, 2016: Court Noord-Holland decided that the legislation change of 2012, in this case the newly added 150 km condition…read more
November 3, 2016: Commissioners were by fiction automatically treated as if they were employees.
Proposed in the Belastingplan 2017 is to …read more
November 17, 2016: The Belastinplan 2017 passed the House of Representatives. A majority rejected the amendments to cancel the 30% ruling and extraterritorial costs. The amendment to cap the 30% ruling at a maximun income of € 178.000 was also rejected.
November 19, 2016: From October 18, 2016, the date we officially launched our website www.the30ruling.nl, the website has been visited by people from at least 100 different countries. Thank you all for visiting our website, and please visit again!
November 28, 2016: We added a selfservice guide for everyone that wants to apply for the 30% ruling themselves.
November 28, 2016: The expensive holidays are coming soon. That’s why we decided to temporarily lower our fees for the application of the 30% ruling.
November 30: Previous visits or employment in The Netherlands will shorten the maximum duration of the 30% ruling. Court Den Bosch …read more
December 10: We added a special Corporate Program. … read more
December 29, 2016: The tax authorities published the income requirements for the 30% ruling for 2017…read more
February 8, 2017: We launched a new website,
The Dutch Tax Return Specialists.
If you want to file your Income Tax Return 2016 or have any other Dutch Income Tax problem that you want to have solved, we will gladly help you.
April 3, 3017: The Ministry of Finance listed the possible changes in legislation to reduce government spending. For the 30% ruling they are (p. 41 and p. 49):

  • capping the 30% ruling at an income of  178,000;
  • cancelling the 30% ruling as of January 1, 2019,
  • adjust the 30% ruling (lower rate, increased conditions, decrease maximum period)

There will be an evaluation of the 30% ruling this summer. Most likely the result of this evaluation will influence the coalition talks. We will have to wait and see if and what changes there will be for the 30% ruling.

June 2017: In the evaluation of the 30% ruling is concluded that the 30% ruling is an effective tool for Expats, but that the benefits could be decreased a bit. Read more…
November 2018: Transitional law for the maximum duration change announced. Read more…

How to qualify


The 30% ruling is meant to attract highly skilled employees to The Netherlands. The term attract means that the employee must be hired while residing outside The Netherlands.


Until 2012, a highly skilled employee was considered to have at least a business degree, 2,5 years of work experience and wages above € 50.000. As of 2012, the qualification as a highly skilled employee is entirely based on the level of your income and is subject to annual review.


Please note that The 30% Ruling Specialists will check if you qualify for the 30% ruling free of charge. Contact us.

If you meet these requirements, then both the employee and the employer file an application with the Dutch tax authorities requesting approval for the 30% ruling. All applications are subject to individual review. If the Dutch tax authorities approve your application, you will receive an official decree confirming that you are eligible for benefits of the 30% ruling.

When making the 30% ruling application, it must be filed with relevant authorities within four months of the start of the employment. If the request comes after this period, a shortened maximum duration of the tax ruling will be applied. Additionally, it will become applicable starting the first day of the following month of which the application has been put in.

To avoid this partial loss, it is important both employee and employer provide all information necessary to file the 30% ruling application as soon as possible.

If you want assistance with filing the 30% ruling application, please contact us.

The tax authorities granted you the 30% ruling and you found a new job. How does that work?

Should an employee to whom a 30% ruling had already been granted by the Dutch authorities finds a new job with another company he and his new employer would have to reapply for the tax regime again. However, the employee would have to sign a contract with the new company within three months of his or her last job. In all cases, the three months starts with an idle period known as Garden Leave which is a period of inactivity at the end of the employee’s last job.

Now you qualify for the 30% ruling conditions, you may want to see the financial implications. We developed a 30% ruling and income tax calculator that will do an income requirement check and calculate the maximum tax-free reimbursement. In some cases your income may be sufficient to qualify for the 30% ruling, but can’t get the maximum reimbursement. The following examples will show you that in detail:

EXAMPLE 1


Assuming your salary is € 54,000, it, therefore, means that you qualify for the 30% ruling. If you select only the 30% ruling option in the calculator, you will notice your taxable income (taxable wage) exceeds the income requirement of € 37,000 (2016: € 36,889). You therefore can benefit from the maximum possible tax-free reimbursement.


EXAMPLE 2


Assuming your salary is €40,000, it, therefore, means that you qualify for the 30% ruling. If you would use the maximum amount of the tax-free reimbursement you would have a taxable income of € 28,000, not enough to qualify for the 30% ruling. Therefore, the tax-free reimbursement has to be adjusted so your taxable income (taxable wage) will be at least € 37,000 (2016: € 36,889). 

SERVICE/FEES  

Check out the services we provide and our related fees.

TAX CALCULATOR

We also have a useful online tax calculator. This will calculate the tax saving that can be achieved with the 30% ruling.

30% RULING DATABASE

Looking for specific information on the 30% ruling or wish to research your eligibility yourself? Our knowledge database contains information on tax law and important court cases relating to the 30% ruling.

THE 30% RULING APP

Through a series of questions, our App will tell you in under 6 minutes whether you qualify for the 30% ruling. And more importantly, if you do not qualify, what can be done to change the outcome. The 30% ruling has now entered into the digital age.

CLIENT PORTAL 

Upload your confidential information in a secured portal. Keep track of the status of your application. Access your documents.

QUESTIONAIRE

Complete our Questionnaire and start the application process for the 30% ruling

Specialists – Contact us now and get started with the process 
What are you waiting for? Download our App. Fill in our Questionnaire. Contact us. Get the 30% ruling.

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