Expat facility ‘the 30% allowance ruling’

The 30% allowance ruling is a special Dutch tax facility for employees who are hired or seconded from abroad and who have specific expertise that is scarcely available on the Dutch labour market.

The 30% allowance grants the employee a tax free allowance of 30% of his taxable salary to compensate “extraterritorial costs”. These are the additional costs relating to their stay or employment outside their country of origin.


There are some conditions which you have to fulfill. The possession of scarce specific expertise is determined on three criteria: education, salary and professional experience. To determine whether an employee has specific expertise that is scarcely available on the Dutch labour market, a minimum taxable annual salary of € 36,889 (2016) is required. For employees under 30 years of age with a master’s degree the salary condition is € 28,041.

Another condition is the distance requirement*. Cross border employees who lived within a 150 kilometer radius of the Dutch border for more than 16 months within a time frame of 24 month prior to starting to work in the Netherlands are not eligible for the 30% allowance ruling. This means most people from Belgium and Germany are excluded from the ruling.

* The European Commission contest the validity of this requirement.

Rough example


The application for the 30% allowance ruling is filed jointly by employer and employee with the Dutch tax authorities. The application should be filed within four months from the start date of the employment to ensure the ruling can be applied fully. The 30% allowance ruling is granted for a maximum of 8 years. Prior stay or employment in the Netherlands can result in reduction of the 8 year period.

Another benefit: deemed non-resident status

Residents of the Netherlands are subject to Dutch taxation on their worldwide income from employment and home ownership (box 1), income from substantial equity interest (box 2) and income from savings and investments (box 3).

Employees who qualify for the 30% allowance ruling can however opt for the deemed non-resident status. If they do so, in the Netherlands, they are only taxable on their worldwide income in Box 1. For Box 2 and 3 they are deemed non resident tax payers. For most employees this means that they are not subject to taxation in the Netherlands for their balance in bank and savings accounts and for the value of investments such as stock and bonds.

New employment

When changing jobs, it is possible to transfer the 30% allowance ruling to the new employer. However, no more than three months should have lapsed between the termination of the previous employment and the acceptance of the new job. The ruling can be continued with the new employer without duration loss, if the extension is applied for within 4 months after the first day of work.

More information?  

Would you like to know more about the 30% allowance ruling? Please contact Alexander Rasink, tax adviser at Global Mobility Services, by e-mail (alexander.rasink@mazars.nl) or by phone: +31 88 277 16 15