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Home/Home/Services/Tax Services/International Tax/30% Ruling

30% Ruling

Tax-exempt allowance for expatriates
 
Subject to conditions, foreign or Dutch expatriates may qualify for a tax-exempt allowance under the 30% ruling. The allowance is for so-called extraterritorial costs (“ET costs”), i.e. costs associated with being stationed in or outside the Netherlands. Under the 30% ruling, ET costs can be reimbursed on a tax-exempt basis without having to provide evidence. In addition, there is an option to top up the 30% ruling with tuition fees payable for international schools and an allowance for non-ET costs.
 
The 30% ruling is mostly relevant to:
  • foreign workers (and Dutch workers who emigrated from the Netherlands more than ten years ago) who have specific expertise that is scarce in the Dutch labour market and who enter into an employment relationship with a Dutch employer or are assigned to a foreign group company ('foreign expatriates'); 
  • employees residing and working in the Netherlands who are assigned to developing countries for at least 45 days over a 12-month period ('Dutch expatriates').
    30% ruling for foreign expatriates
    The 30% ruling gives an employer the option of offering employees a tax-free allowance of 30% over and above their gross salary.
Criteria:
  • The employee is recruited abroad or assigned within an internationally operating group.
  • The employee has an employment relationship with a Dutch-based withholding agent, i.e. a Dutch employer or a foreign employer located or registered in the Netherlands.
  • The employer and the employee have agreed on the 30% ruling.
  • The employee has specific expertise that is scarce in the Dutch labour market, if available at all. This specific expertise should be demonstrated by the employee’s professional qualifications, the experience relevant to the job and the pay level. Middle managers or executives of a multinational who have at least 2.5 years’ experience and are assigned as part of a job rotation programme are considered to possess specific expertise.
  • The employer and the employee jointly apply for a 30% ruling to the foreign taxpayers unit of the Dutch Tax & Customs Administration.

Duration

The 30% ruling is awarded for a ten-year period. Previous periods of residence or work in the Netherlands are deducted from this ten-year period in principle.
 

30% ruling for Dutch expatriates

Until 1 January 2001, employees who were stationed in specifically designated developing and other countries had the option of qualifying 35% of their income as notional costs; this was known as the so-called Nedeco ruling. This facility was abolished and integrated into the 30% ruling on 1 January 2001. As a result, these employees also qualify for a 30% tax-exempt allowance on top of their gross salary.
 

Criteria

Qualifying Dutch expatriates include:
  • employees stationed in specifically designated regions, such as Asia, Africa, Latin America and most Eastern European countries;
  • civil servants stationed abroad, including military personnel;
  • teachers To qualify, the assignment should span at least 45 days over a 12-month period.More informationPlease feel free to contact one of our International Tax specialists to find out more about the 30% ruling.

To qualify, the assignment should span at least 45 days over a 12-month period.

More information

Please feel free to contact one of our International Tax specialists to find out more about the 30% ruling.