The 30% rule

Crucial benefits for expats

In the Netherlands, the so-called 30% rule serves as an essential tool for employers to fulfill legal requirements while offering substantial advantages. Our team of experts is prepared to assist your organization in maximizing the benefits of the 30% rule/ruling. Would you like to benefit from Crowe Peak’s advice directly? Please fill out the contact form. 

What is the 30% ruling?  

The 30% ruling represents a tax arrangement enabling companies to attract highly skilled foreign employees under favorable tax conditions. This scheme allows for tax-free payments of up to 30% of the gross salary for eligible employees, contingent upon factors such as salary amount, the employment contract’s commencement date, and the duration of the arrangement. 

The purpose of this scheme is to cover the additional costs linked to relocating and working in another country, and therefore, it has a limited duration of up to 5 years. Even if the actual incurred costs are lower than the benefit provided, the 30% rule still applies. Given the substantial financial advantages the scheme offers to expatriate personnel, its utilization is imperative for any organization aiming to compete in the highly skilled labor market. 

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The 30% rule and “free space”: specialized advice 

In conjunction with the 30% rule, the free space within the work-related costs scheme (werkkostenregeling) can also be leveraged to offer tax-advantaged benefits to incoming employees. The free space (vrije ruimte) within the work-related costs scheme constitutes the portion of employees’ income wherein employers can allocate tax-free allowances according to their discretion. Utilizing this free space appropriately demands insight and expertise. We are delighted to offer our expert guidance in this area

30% rule: changes in 2024 

In the Netherlands, the 30% rule/ruling has been a topic of discussion for a while now. Starting this year, adjustments have been implemented regarding the maximum gross amount and the percentage of the tax-free allowance. Are you interested in learning more about these changes or would you like insights into alterations concerning the free allowance? Feel free to reach out to our specialists for further information.  

Revision of the 30% ruling 

Due to a recent amendment to the Dutch Decree on Fiscal Administrative Law there is now a provision allowing the review of decisions related to the 30% ruling even after the objection term has lapsed. Per January, this ex officio policy, formerly only applicable to a limited number of Dutch tax decisions, has been extended to decisions concerning the 30% ruling. This implies that, in most cases, apparent errors in 30% ruling decisions can be rectified beyond the official six-week objection term. If you require guidance on this new opportunity or assistance with the application of the 30% ruling within your organization, please reach out to our Global Mobility Services and international tax team. 

Other tax-free allowances 

Apart from the free space and the 30% rule, there are several untaxed allowances available to employees, such as: 

  • Relocation allowance: Reimbursement for expenses associated with an employee’s relocation to the Netherlands 
  • International school fees: Reimbursement for the school fees of international schools attended by the employee’s children. 

The options within the free allowance are diverse and can yield substantial benefits for both employers and employees. It is essential to highlight that the specific conditions and applications of these untaxed allowances under the 30% rule rely on individual circumstances. Seeking specialized advice in this domain is therefore recommended. 

Why Crowe Peak? 

Crowe Peak acknowledges that there is no universal solution for the diverse challenges of international staffing. Our Global Mobility Services (GMS) team provides personalized solutions aligned with your business requirements. We endeavor to assist your business by delivering tailor-made solutions that not only facilitate adaptable operations in various international markets but also ensure complete control over your HR processes. 

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