The Advantages of the 30% Ruling System in the Netherlands

Foreign citizens relocating to the Netherlands benefit from many tax deductions, one of the most important being the 30% tax ruling which was created for highly-trained and specialized employees of Dutch companies.

Under the 30% tax ruling, the employer can grant a tax allowance equal to 30% of the employee’s gross salary under the payroll tax. In order to offer this allowance, certain conditions must be met. Also, the 30% ruling comes with other advantages.

Our company formation agents in the Netherlands can explain business owners their rights and obligations as employers. They can also assist those who want to open company in this country.

The conditions to benefit from the 30% ruling in the Netherlands

Both the employee and the employer can benefit from the 30% tax ruling, as long as they meet the following requirements:

• - the person benefiting from the 30% ruling must have an employment contract with the Dutch company;
• - the employment contract must contain a specific clause about the allowance under the 30% ruling;
• - the employee must be a foreign citizen who was recruited directly or transferred by the Dutch company;
• - the employee must have specific qualifications, knowledge or experience which could not be found by the local employer;
• - the Dutch employer must meet certain salary requirements (the salary must be above the minimum gross salary per year).

We also offer accounting and payroll services to Dutch companies interested in such services.

The benefits of the 30% ruling for the Dutch employer and employee

The 30% ruling benefits both the employer and the foreign employee in the Netherlands. These advantages refer to:

• - in the case of the employer, the salary paid to the employee will be reduced by 30%;
• - in the case of the employee, 30% of the expenses related to the salary will be reimbursed;
• - when filing the tax return as an employee, the foreign citizen can use the partial non-residence status in the Box system;
• - the foreign employee can exchange his or her foreign driver’s license for a Dutch one without taking an exam.

For more information on the 30% tax ruling or for assistance in opening a company in the Netherlands, do not hesitate to contact our local company registration advisors.