The Hague Netherlands

The Dutch 30% allowance ruling

Under certain circumstances, internationals who come to the Netherlands for work can claim a 30% tax exemption. This means that 30% of the salary is paid without tax deduction. This tax-free allowance is considered a compensation for the extra costs due to living outside of the home country. When is one eligible for the ruling?


Firstly, one must have a specific expertise that is scarcely available on the Dutch labour market. Overall, employees are deemed to have a specific expertise if their taxable salary in 2017 amounts to at least Euro 37,000. If their taxable salary is less than Euro 37,000, then in principle they seize to qualify for the ruling.

For employees under the age of 30 who have acquired a master title at a foreign university, a minimum taxable salary of Euro 28,125 applies. For scientific researchers at specific institutions and for medical doctors trained to become medical specialists no salary criterion applies. They always come into consideration for the 30% allowance.

Secondly, the employee must be hired from outside a 150 kilometer radius from the Dutch border. In the 24 months prior to the start of the employment in the Netherlands, the employee must have lived outside this radius for at least 16 months.

Maximum period

On the basis of this ruling, employees are eligible for a 30% tax-exempt allowance for a maximum period of 8 years. However, in case the employee has previously lived or worked in the Netherlands, the maximum period of 8 years will be reduced. This concerns periods of prior living and/or working in the Netherlands that ended within the last 25 years.

Seperate alllowance

In order to qualify for the 30% allowance ruling, employer and employee must agree on a separate allowance. This allowance must be paid to the employee together with his regular salary. In addition, employer and employee must specifically agree that, for tax purposes, the wage of the employee will be reduced to 70% and that the employee is in principle entitled to a net allowance of 30/70 of the reduced wage.

Four month period

Employer and employee must jointly apply for allowance within four months from the start of employment. In case they apply outside the four-month period, the ruling can only be granted as of the first day of the month following the month in which the application was made. As a result, the ruling cannot be granted for the full 8-year period. This is because the allowance will not be granted retroactively until the date of commencement of employment.

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