The 30% ruling for expats

The 30% ruling for expats

Expat Guide to the Dutch Housing Market

Moving abroad is a costly business. The Netherlands grants highly skilled employees moving to the Netherlands a tax advantage: the so-called 30% ruling. What does the 30% ruling entail? What conditions are to be met? An introduction.

The 30% ruling allows employers to offer 30% of your salary tax-free. This means you only pay tax over 70% of your gross Dutch salary. Different rules apply to different cases: make sure you get professional advice on your case specifically before you make arrangements. Check out the website of the Dutch Tax Office: de Belastingdienst.


Who benefits from the 30% facility?

The 30% facility applies to you if you were recruited outside of the Netherlands or seconded from a country other than the Netherlands to work in the Netherlands. Conditions including the following will apply to making use of the 30% facility:

  • You have an employment relationship;
  • You are recruited from another country by your employer, or you are sent from another country to your employer;
  • You have specific expertise that is not or is only barely available on the Dutch employment market;
  • You have a valid decision.

Go to the Dutch Tax Office website


5 year period

Previously, expats were allowed to make on the 30% ruling for a period of 8 years. As of January 1st 2019, this period of tax advantage has been shortened to 5 years.

This tax-break is meant as a compensation for extra expenses you make when working outside your home country, the so-called extraterritorial costs. You are not obligated by the Dutch Tax Office to prove that expenses have been incurred.


Extraterritorial costs

These extraterritorial costs include expenses such as:

  • travel costs to get acquainted with the country, visiting schools and looking for a home;
  • extra housing costs;
  • visa costs;
  • storage costs for household effects back home;
  • costs to follow a Dutch language course for the employee and the family members staying with them.

Check this website of the Dutch Tax Office for a complete overview of all extraterritorial costs. Again, you are not obligated by the Dutch Tax Office to prove that expenses have been incurred.

These costs do not include expenses such as:

  • purchase and sales costs of a home including brokers fee;
  • tax equalization (i.e. compensation for higher tax rates in Holland compared to the employee’s home country).

Income tax is not the only form of taxation you’ll come across in the Netherlands. Read more about taxes in these posts! {LINK}

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