Substantial tax relief for expats

The most significant benefit is that the full Dutch taxable salary is reduced to a 70% taxable salary (i.e. 30% of agreed wage is exempt from payroll tax and personal income tax. The Tax and Customs Administration offers a maximum effective tax rate of 36,4% (30%*100/70 of the gross salary) so that expats can cover their extraterritorial expenses. These expenses are costs that (nearly) all expatriates have to cover when working away from their homeland and may include:

• Costs of water, gas, electricity etc (if prices in the Netherlands are higher than in the country of origin)
• Application costs for residence permits, visa, driving licenses, etc.
• Hotel expenses (if expats still live in their homeland)
• Various housing costs ( especially in the initial stage)
• Traveling expenses and / or telephone costs to country of origin
• Dutch course costs for the expat and his / her family

Other ( tax )reliefs

• Additional tax-free reimbursement for certain expenses (i.e. fees for international schools for expatriates’ children).
• Possible exemption from the Dutch net-wealth taxation (i.e. partial non-resident taxpayers).Investments in real estate are not included though.
• Tax-free income from interest in any non-Dutch entity.
• All other income tax deductions still remain applicable.
• Entrepreneurial expats can also use this ruling if employed by their corporation (Ltd or Dutch BV). Besides, they can take advantage of this compensation to attract more specialists from abroad.

Conditions


In order to be eligible for the 30% ruling the following conditions have to be met:

• The employee has to work for an employer
• Employer and employee have to agree in writing that the 30% ruling is applicable
• The employee has to be transferred from abroad to a Dutch employer or has to be recruited from abroad by a Dutch employer
• The employee has to have specific experience or expertise which is not, or rarely available in the Netherlands, for example specialists in a specific line of business.

For more information
on how to calculate the tax breaks on offer to expats in the Netherlands