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Expat rules: 30% Tax advantage for expats in The Netherlands

Expat rules: 30% Tax advantage for expats in The Netherlands

New requirement thresholds for the 30% tax ruling in 2018

First of all, what is the 30% tax ruling exactly? It’s a special tax reduction (also known as 30% facility) for new incoming employees starting a job in the Netherlands. It’s a very useful (untaxed) reimbursement to cover all of your ‘extraterritorial expenses’ like accommodation, maintenance and foreign travel for family visits. Only employees coming in with a special expertise will be able to receive this tax advantage. The special expertise is qualified by salary. Before we explain more about how to apply for the 30% tax ruling, make sure you reach the following requirements!

New wage thresholds
The requirements for the wage tax have changed as of 2018, make sure you reach at least the minimum of the required amount to receive your benefits. Check with your payroll department to find out your exact wage tax.

2018 thresholds:
Over 30 years old — minimum of €37.296
Under 30 years old and in possession of a Masters Degree or an equivalent degree from a recognized university — minimum of €28.350

Distance rules
Before your employment in the Netherlands, you need to have lived at least 150km from the Dutch border for the last 24 months. However when you have just obtained your PhD or have done most of your master’s degree and/or internship in the Netherlands, the rules are a bit different. In that case, you may be eligible for the 30% ruling.

Timing is of the essence!
Make sure to apply within the first 4 months of your employment. When you apply after 4 months, your chance of approval might be jeopardized.

Never ending?
Unfortunately not. The term of the 30% tax ruling is a maximum of 8 years. Pay special attention though! If you have lived and worked in the Netherlands before, within 25 years prior to your current arrival in the Netherlands, those years will be reduced from the 8-year count.

Applying for the tax reduction can be done through the Dutch Tax authority, the Belastingdienst. This must be done in conjunction with your employer within 4 months after your first day of employment, as we mentioned. You can also check the website of the Belastingdienst for more information.

If you need any help to make sure you are qualified for this benefit, you are welcome to contact us!