The 30% regulation is a tax incentive meant to attract foreign employees with specific expertise to the Netherlands. If all conditions for the 30% ruling are met and the 30% ruling is granted, the employer is allowed to grant the employee a tax free allowance up to a maximum of 30% of his gross taxable salary. This tax free allowance is considered to be a compensation for the extra costs ("extra territorial costs") the foreign employee incurs for working outside his home country. Instead of itemizing all the specific extraterritorial costs, the employer is, once the 30% ruling is granted, allowed to consider 30% of the agreed compensation package as reimbursement to cover these costs.
The favourable 30% ruling (or in Dutch "30%-regeling") allows expatriate employees who work in The Netherlands to earn up to 30% of their compensation tax free.
In addition, the 30% ruling also allows you, the expat, to opt for the partial non-residency status. With the partial non-residency status you are exempt from Dutch taxation on your investments (except for investments in Dutch real estate). US nationals with the partial non-residency status can also claim a deduction for employment income allocated to non-Dutch workdays.
Finally, with the 30% ruling you and your partner are allowed to exchange your foreign driver's license for a Dutch driver's license without having to take time-consuming tests.
Because of these benefits, the 30% ruling is generally considered to be the single most essential part of prudent tax and financial planning for employers and expats coming to work for them in the Netherlands. The application and the implementation of the ruling should therefore not be taken lightly.
Ensuring that you have a knowledgeable party assisting you is therefore not a luxury. OnestopTax BV is specialised in obtaining and implementing the ruling and assists both employees and employers in the entire process. This includes:
- Review of and planning towards qualifying for the 30% ruling
- Applying for the 30% ruling
- Implementation of the 30% ruling in compensation packages
- Personal Service
- Competitive Fees