What is the Dutch 30% ruling and who qualifies for it?

The 30% ruling (30%-regeling) is a Dutch tax benefit for employees recruited from abroad to work in the Netherlands. It allows qualifying employees to receive up to 30% of their gross salary as a tax-free reimbursement for extraterritorial costs, reducing their effective income tax burden significantly.

To qualify, the employee must have been recruited outside the Netherlands, must have specific skills that are scarce in the Dutch labour market (determined by a salary threshold test), and must have lived more than 150 kilometres from the Dutch border during the 24 months before starting work in the Netherlands. For 2024, the minimum salary threshold is €46,107 gross per year (€35,048 for employees younger than 30 with a master's degree).

The ruling is granted for a maximum of 5 years (reduced from 7 years in earlier legislation). Applications are made jointly by the employer and employee to the Belastingdienst within four months of the start of employment. If approved, the tax-free portion appears directly on the payslip.

From 2024, the ruling has been partially capped: the tax-free reimbursement is limited to 30% in the first 20 months, 20% in the next 20 months, and 10% in the final 20 months of the 5-year period.