What is the Dutch 30 percent ruling?

2 min

It is a special tax regime for expats that come to the Netherlands to work. It is a reduced tax rate for a period of time, for these newly arrived expats.

The 30% ruling

Simply put the 30% ruling allows an employer to grant an employee a tax-free allowance of up to 30% of his total remuneration to cover expenses related to his placement abroad that he would not have had had he not been sent abroad, for instance, housing-related expenses.

Your total gross remuneration is reduced by 30% and in return, you receive a 30% tax-free allowance. The result of the 30% -ruling is a higher net salary.

When applying for the Dutch 30% ruling, the employee may choose to have a resident or partial non-resident tax status.

Partial Non-Resident Tax Status

Expats who are partial non-residents owe taxes on income derived from certain sources specifically stated in the Dutch income tax legislation.

Partial Non-Residents are also entitled to tax deductions insofar as they relate to specific income sources, alimony payments, and mortgage interest payments for the principal places of residence.

A final important observation regarding partial non-residents is that, contrary to resident taxpayers, their net wealth is not taxed here. Hence, the ideal mortgage for a partial non-resident takes advantage of the fact that the interest payments on the mortgage are tax-deductible and that the investment income is not taxed.

Americans Overseas helps you with the Dutch 30 percent ruling

Americans Overseas offers a large independent network of US tax accountants and financial planners, specialized for Americans living abroad. Based on your personal situation, we provide information and introduce you to the appropriate expert in our Americans Overseas network, free of charge and free of any obligation. 

Contact us for more information