What does the 30% Tax Ruling mean for employers?
When you decide to hire an employee from abroad and relocate them to the Netherlands, you’ll often incur some extra costs. So-called, extraterritorial costs. You’re allowed to reimburse these costs tax-free. But you can also choose to pay up to 30% of your employees’ salary, untaxed. This is what we call the 30% Tax Ruling. Curious to find out how it works?
If you want to make use of the 30% Tax Ruling as an employer, you’ll have to apply to the Dutch Tax and Customs Administration (Belastingdienst). Of course, there are certain criteria you have to meet:
Criteria 30% Tax Ruling:
- The employee is legally employed by your company
- The employee has been recruited from outside the Netherlands to come work in the Netherlands.
- The employee possesses specific knowledge or skills that are not or barely available in the Dutch market.
- Of the 2 years before the 1st day of work in the Netherlands, the employee has lived outside of the Netherlands for a total of at least 16 months, at a distance of at least 150 kilometers from the Dutch border.
- You have a valid decision from the Dutch Tax and Customs Administration. This decision states that both the employer and employee have a right to make use of the 30% Tax Ruling. The date of the decision determines the duration of the ruling.
- If an employee joins a new employer within 3 months after leaving the company, they can re-apply and continue the 30% Tax Ruling with their new employer.
- The employee needs to earn at least €38,347.00 gross per annum, excluding the 30% Tax Ruling or cost reimbursement. For employees under the age of 30 who are in possession of a Master’s degree or equivalent, the income requirement is lowered to €29,149.00 gross per annum excl. the 30% Tax Ruling or reimbursements.
Are you looking to hire from abroad or need help applying for the 30% Tax Ruling?Get in touch!