The 30% Tax Ruling
The 30% Tax Ruling
The 30% ruling is very beneficial for employees, since 30% of your salary is paid out on a tax-free basis. From a tax perspective, the salary agreed upon between the employee and employer will be reduced by 30%. In return, the employee will receive a 30% allowance as reimbursement for expenses. The 30% ruling is meant as a compensation for the extraterritorial costs, basically meaning the extra costs an employee coming from abroad has due to his relocation.
Applying for the 30% ruling
A well-structured and clear application is essential to obtain the benefits of the 30% ruling. Our specialised tax consultants know how to make sure your case is well presented to the Dutch Tax Authorities. This will increase the chances that your application is accepted. In case your first application was rejected, we can help and restructure, in order to increase the chances of acceptance of the second opinion. Once the 30% ruling is granted, the ruling will have to be processed and applied to both Wages Tax return and Income Tax return.
30% ruling requirements
In order to obtain the benefits of the 30% ruling in the Netherlands, you are required to show a particular scarce skill or expertise, and you have to be recruited by a Dutch employer from abroad. The requirements are:
- The specific expertise requirement is mainly based on a minimum salary requirement of € 4.612 gross per month (for highly skilled migrants older than 30) or € 3.381 gross per month (for highly skilled migrants aged 29 or younger);
- Prior to your employment in The Netherlands, you need to have lived further than 150 kilometres from the Dutch border during the last 24 months;
- The minimum taxable salary needs to be € 28.690 (in 2020). For employees under the age of 30 who have obtained a master’s degree at a foreign university, the minimum required taxable salary (70%) is 29.129, which means about € 41.641 gross salary (including the 30% tax-free part).
The free allowance can be less than 30%, since the law requires a minimum taxable salary and it is possible to reduce the tax-free allowance to a lower percentage than 30% as such that the minimum required taxable salary is met.
Periods in which you have lived and/or worked in the Netherlands, will be deducted from the 30% ruling period. If you change jobs, you can to be unemployed for a maximum period of 3 months, otherwise you will lose the 30% ruling.
In case the 30% ruling has been granted, you can opt for partial non-domestic taxation, which releases you from the obligation to pay taxes on your worldwide wealth in box 3. On top of this, you will be exempt from tax on income from savings and investments, as well as taxation on dividends from substantial shareholdings, with some exceptions. Needless to say, but this is a very important point that shouldn’t be forgotten.
In case the 30% ruling has been granted, you also qualify (in most cases) for an easy swap of your (and your partner’s) driver’s license. The Dutch authority will issue a Dutch driver’s license for you and they will take your current driver’s license and send it back to the country of issuance, where you can claim it back.
Contact us now
If you’re about to join the Qlick Talent Pool and you would like us to clarify things for you, don’t hesitate to get in contact.
Qlick is a workforce management solutions provider, specialized in recruitment, comprehensive payroll and tax filing services for employers and employees, in accordance with the relevant Dutch legislation.