30% Tax Ruling
The 30% Ruling for Highly Skilled Migrants in the Netherlands
The 30% ruling is a tax advantage designed to attract highly skilled workers to the Netherlands by compensating for extra costs incurred when relocating from abroad. Employers can offer this benefit, allowing up to 30% of the employee's gross salary to be paid tax-free. This tax-free allowance is intended to cover extraterritorial costs such as higher living expenses and relocation expenses.
Additional Benefits of the 30% ruling
After 1 January 2025, the following additional benefits of the 30% ruling will remain applicable for highly skilled migrants who qualify:
Tax-Free Reimbursement of Extraterritorial Costs: Employers can choose to reimburse actual relocation and other extraterritorial costs tax-free as an alternative to the percentage-based allowance.
Driving License Exchange: Eligible employees will still be able to exchange their foreign driving license for a Dutch one without retaking driving tests.
Tax-Free Reimbursement of International School Fees: Employers can continue reimbursing international school fees for employees' children tax-free.
Eligibility Criteria
To qualify for the 30% ruling, the following conditions must be met:
The employee must be recruited from abroad or transferred to the Netherlands within a multinational company.
They must have lived at least 150 km from the Dutch border for 16 of the 24 months before moving to the Netherlands.
The employee must possess specific expertise that is scarce or unique in the Dutch labour market, reflected in meeting a minimum income standard. The minimum income requirements as of 1 Jan 2025 (this amount changes yearly) is dependent on age:
Highly Skilled Migrants 30 years or older: € 5.688 gross per month
Highly Skilled Migrants younger than 30 years: € 4.171 gross per month
A formal application must be submitted to the Dutch Tax Administration (Belastingdienst), which will issue a decision if the criteria are satisfied.
Employees working in designated research facilities or doctors in specialist training are exempt from the income requirement.
Changes to the 30% Ruling (Effective 1 January 2024)
Reduction of Tax-Free Percentage: Employees who start using the 30% ruling after 1 January 2024 can receive 30% tax-free until 2027, after which the percentage reduces to 27%.
Introduction of a Salary Cap: Starting in 2024, the tax-free reimbursement applies only up to the maximum remuneration (Balkenende norm). This cap is updated annually.
Taxation of Foreign Income (Box 2 and 3): As of 2025, employees using the 30% ruling will no longer qualify for partial foreign tax liability, meaning they must declare and pay taxes on foreign substantial interest (box 2) and savings and investments (box 3) in the Netherlands.
Transitional Arrangements
Employees with 30% Ruling Before 1 January 2024: The 30% tax-free allowance continues without the salary cap until 2026. Partial foreign tax liability benefits remain until the end of 2026.
Employees with 30% Ruling After 1 January 2024: The full 30% tax-free allowance applies until 2027, when it reduces to 27%.
Employees with 30% Ruling Before 1 January 2023: No salary cap applies until 2026, ensuring continued benefits for existing users.
Application Process
To apply for the 30% ruling, employers must submit a request to the Dutch Tax Administration within four months of the employee's start date. Supporting documents, such as employment contracts and proof of expertise, must be included. The tax authority typically responds within 10 weeks.
Key Notes on Continuity
A new employer cannot automatically transfer an existing 30% ruling; a fresh application is required.
If a company undergoes a takeover, employees retain their 30% ruling under the new ownership.
For more information, visit Business.gov.nl.