The 30% ruling (30%-regeling) is one of the most significant tax advantages available to expats working in the Netherlands. Under this arrangement, employers can pay up to 30% of an employee's gross salary as a tax-free allowance to compensate for the extra costs of living abroad (extraterritorial costs). This effectively means only 70% of your salary is subject to Dutch income tax, which can result in savings of several thousand euros per year.
Eligibility Criteria
To qualify, you must meet specific criteria. You must have been recruited from abroad or transferred from a foreign branch of your company. You must have specific expertise that is scarce or unavailable in the Dutch labor market. There is a minimum salary requirement (around €42,000 gross per year for 2024, or roughly €32,000 for employees under 30 with a Dutch master's degree or equivalent). Additionally, you must have lived more than 150 kilometers from the Dutch border for at least 16 of the 24 months before starting your Dutch employment.
Recent Changes and the Phase-Out
Recent changes have scaled back the ruling. As of January 2024, the Dutch government began phasing down the tax-free percentage. From 2024, it's still 30% for the first 20 months, then 20% for the next 20 months, and 10% for the final 20 months. The ruling now lasts a maximum of 5 years in total. These changes apply to new applications. Those already approved under the old rules may be grandfathered in, depending on when they started.
How to Apply
To apply, your employer submits the request to the Belastingdienst (Dutch tax authority) on your behalf. You'll need your employment contract, proof of previous residence abroad, and evidence of your specific expertise. Processing typically takes 2 to 4 months. Beyond the salary tax benefit, the 30% ruling also allows you to opt for "partial non-resident taxpayer status," which exempts savings and investments from Dutch wealth tax (Box 3). This is especially valuable for expats with significant assets abroad.
Related Resources
For more on taxes and financial life in the Netherlands, visit our economy section. You may also want to understand your Dutch payslip to see how the ruling appears in your salary breakdown.