30% Dutch Tax Ruling Demystified
Developer Careers Hunter Wright
The Netherlands 30% tax ruling is attractive for highly skilled international workers. This ruling entitles employees who are new to the Netherlands to a 30% tax exemption. It is intended to be used as a means of reimbursing the employee for costs incurred through the relocation process. However, neither the employee nor employer is required to provide proof of any costs incurred in order to prove eligibility. Here is our breakdown of what is required and how it works:
30% Dutch Tax Ruling Application Requirements
1. You must have spent the last two years living at least 150 km from the Netherlands. exceptions to this rule for anyone that has completed a PhD.
2. Though this program is marketed as a program for expats with in-demand skillsets. These expert skillsets are not listed on the application, nor are they defined by industry or qualification. They are defined by your salary.
More specifically you qualify for the exemption if you make over €37,000 after the 30% tax reduction. This decreases if you are under the age of 30 and possess a Master’s degree, to €28,125. If you are working in the Netherlands at a research institution conducting scientific research, you are entitled to the 30% ruling regardless of your salary.
For example, assume the gross annual salary of a developer is €100,000 before the 30% rule is applied. The employee and employer can agree to pay 30% of this amount as a tax free allowance, €30,000, meaning the taxable gross salary remaining is €70,000. As long as the remaining taxable gross salary is above the required €37,000, you’re eligible.
3. If approved, the ruling has a term of 5 years. There are some conditions.
4. If you are already working in the Netherlands and fulfil the criteria for eligibility but have not applied for the ruling, it is possible to retroactively apply. You can get back payments for up to four months after you start working. If you have been in your position longer, the ruling will become effective the following month after your successful application.
Getting a Dutch Driving License
When you qualify for the 30% exception, you are entitled to exchange existing driving licenses for a Dutch license without needing to take a test. If agreed with your employer you can also be reimbursed for any school fees which may have been incurred.
How To Apply
1. You and your employer must agree that you are eligible and willing to apply for the ruling.
2. Together with your employer you must complete the application form and return it to the Belastingdiesnt (Tax Administration).
3. Include the required documentation. You will need to provide:
-Proof of ID other than a Driver’s license.
-Proof of residence 150km from the Dutch border prior to this position.
-A copy of your employment contract in the Netherlands.
-Your Citizen Service Number (BSN).
-Your Dutch address.
-Your employer’s Withholding Tax Number. -Documented proof of your employer as a registered employer in the Netherlands.
-If applicable, documents showing that the employee has obtained a Masters, PhD, or is conducting scientific research with an educational institute.
For developers looking for exciting new challenges in a fresh environment, few places can entice talent with such appealing perks as the Netherlands. Companies like Uber, Netflix, and TomTom already call the Netherlands their european home. This strong eco-system and infrastructure has also helped turn many homegrown startups into success stories by attracting many new startups to the Netherlands. As such, developers are in high demand.