30 Percent Ruling Netherlands
The Dutch government has reduced the 30 percent ruling period to five years from Januari 1st 2019. In principle the 30 percent ruling will now terminate after 5 years unless this period is reached in 2019 or 2020. In this case the 30% ruling will terminate as per the 30% decision or latest January 1st, 2021.
The 30 percent ruling is quite beneficial since 30 percent of your salary is paid out on a tax free basis. The 30 percent ruling is meant as a compensation for the so-called extraterritorial costs which include the extra cost for accommodation and travel in a foreign country.
Applying for the 30 percent ruling
A well-structured and timely presentation is essential in the request to the Tax Service. Our specialized tax consultants know how to make sure your situation is well presented to the Dutch Tax Authorities. This will increase the chance your application is accepted. We have also achieved good results for internationals who came to us for a second opinion after their first application was denied.
Once the 30 percent 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 this 30 ruling in the Netherlands you are required to show a particular scarce skill or expertise and have to be recruited by a Dutch employer from abroad. Here you find the list of specific requirements:
- The specific expertise requirement is mainly based on a minimum salary requirement of € 38.347 in 2020 (2019: € 37.743) taxable salary plus the 30 percent allowance, which means about € 54.718 in 2020 (€ 53.918 in 2019) gross salary (including the 30 percent tax free part);
- Prior to your employment in the Netherlands you need to have lived further than 150 kilometers from the Dutch border during the last 16 months out of 24 months;
- Specific regulations apply to graduates and research scientists. If PhD graduates are offered a job in the Netherlands after they graduate, they are not obligated to have lived abroad before accepting the job. The minimum taxable salary needs to be € 29.149 in 2020 (2019: € 28.690). For research scientists there is no minimum salary;
- Periods in which you have lived and/or worked in the Netherlands will be deducted from the 30 ruling period. (Dutch people are obliged to have lived at least 25 years abroad before being recruited to be counted as an expat);
- If you change jobs you need to be unemployed for a maximum period of 3 months otherwise you will lose the 30 percent ruling.
30 ruling Netherlands: opt for partial non-domestic taxation
If you have the 30% ruling 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. Along with some other practical advantages, such as an easier procedure for acquiring a Dutch driving license, this makes the 30 ruling a very favourable arrangement for expatriates.
30 ruling for starting businesses
If you wish to start a business in the Netherlands, it is very worthwhile to investigate whether you could qualify for the 30%-ruling as employed by your company. In this case the company and payroll will need to be set up before you start working.
Contact us now
If you would like to know what the possibilities are in your case or seek advice how to apply the 30 ruling, please do not hesitate to contact us.