30% Allowance ruling

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Employees who are hired or seconded from abroad and who have a specific expertise that is scarcely available on the Dutch labour market, are in principle eligible for the 30% allowance ruling.

Someone has a specific expertise if he/she earns a taxable salary of at least €35.000 on an annual basis (excluding the 30% tax free part);

Another condition which should be met is the fact that the employee should not have resided in a radius of 150 kilometre from the Dutch border during 16 months in a time frame of 24 months prior to starting to work in the Netherlands.

On the basis of this ruling, for a maximum period of 8 years, these employees are eligible for a taxexempt allowance amounting to 30/70 of their wage taxable in the Netherlands. However, in case the employee has lived or worked in the Netherlands during the last 25 years prior to his application for the 30% allowance ruling, the maximum period of 8 years will be reduced.

In order to qualify for the 30% allowance ruling, employer and employee must agree on a separate allowance and this allowance must be paid to the employee together with his regular remuneration. The application for the 30% allowance ruling must be made jointly by employer and employee within four months from the date of commencement of the employment. In case the application is filed outside the four-month period, the ruling can only be granted as of the first day of the month following the month in which the application was made. As a result, in this case the ruling can never be granted for the full 8-year period since the ruling will not be granted retroactively until the date of commencement of the employment.

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