For foreign employees who come to work in the Netherlands, the costs can add up. Think of relocation, double housing costs and higher daily expenses. To compensate for this, the 30% rule (also called 30% ruling) exists.

This tax arrangement can provide a significant tax benefit for expats and their employers. At Arslan Advocaten we regularly advise expats and employers about the application and conditions of the 30% rule.

What is the 30% rule?

The 30% rule is a tax benefit for employees coming to work in the Netherlands from abroad.
Employers may pay a maximum of 30% of the gross salary tax-free. This is intended as compensation for the so-called extraterritorial costs that expats incur.

Conditions for the 30% rule

Not every foreign employee is eligible. The main conditions are:

• The employee was recruited from abroad by a Dutch employer.

• The employee possesses specific expertise that is scarce in the Netherlands. This is tested against a minimum gross annual salary (the income requirement).

• The employee lived more than 150 kilometers from the Dutch border before taking up employment.

• The employer and employee have together made a written agreement to apply the 30% rule.

Duration of the scheme

Since 2019, the 30% rule can be applied for a maximum of 5 years. Previously it was 8 years.

Examples from practice

• Example 1: An IT specialist from India is recruited by a Dutch company. His salary is €60,000 gross per year. Thanks to the 30% rule, 30% (€18,000) can be paid out tax-free, making his net income significantly higher.

• Example 2: An expat from Germany lived just across the border (within 150 km). Despite his expertise, he did not get the 30% rule because he did not meet the distance requirement.

• Example 3: A Spanish professor was appointed at a Dutch university. He received a temporary contract of 4 years. Thanks to the 30% rule, the university had to pay less gross salary to give him the same net income.

Extra benefits of the 30% rule

In addition to the tax benefit, there are some additional benefits:

• Expats with the 30% rule can opt for partial foreign tax liability. This means that certain foreign income remains outside Dutch tax collection.

• Unburdened compensation of real extraterritorial costs remains possible in addition.

• For some employees, there is an exemption from tax on tuition fees for international schools for their children.

Checklist: application of the 30% rule

• 📝 Check that the salary meets the minimum limit.

• 🌍 Assess whether the employee lived >150 km from the Dutch border.

• 🤝 Record the agreement in writing in the employment contract or an addendum.

• 📂 Apply for the 30% rule on time with the tax authorities (within 4 months of employment).

• ⚖️ Have the application and calculation checked by a lawyer or tax advisor.

Why Arslan Advocaten?

• Expert advice for both expats and employers

• Guidance with the application to the tax authorities

• Reviewing employment contracts and tax risks

• Many years of experience in employment and tax law

FAQ about the 30% rule

1. How much tax benefit does the 30%-regulation provide?
Up to 30% of the salary can be paid out tax-free, which can save thousands of euros per year net.

2. Can the 30%-rule be applied retroactively?
Yes, if the application is made within 4 months of employment, the scheme applies from the first day of work.

3. What happens if my salary falls below the income limit?
Then the scheme expires. It’s therefore important to check this annually.

4. Does the scheme also apply to self-employed individuals (freelancers)?
No, the scheme only applies to employees.

5. How long does the 30% rule apply?
For a maximum of 5 years, providing you continue to meet the conditions.