#expattax

Five myths about the Dutch 30%-ruling in one sentence:

"30% ruling is a tax benefit for highly skilled migrants working for a Dutch company in the Netherlands"

Let's debunk them but first, let's take a look at the benefits of the 30%-ruling and the main requirement for obtaining it.

Why would an expat want to apply for the 30% ruling?

  • 30%
     of gross salary is exempt from income tax (5 years max).
    01
  • The holder of the ruling
     and their family can exchange their driver's licenses for local licenses without retaking the exams (saving time, effort, and money).
    02
  • You are allowed not to declare
     (5 years max) your foreign assets (boxes 2 and 3 of the declaration) and not to pay income tax on them.
    03
Examples of exempt income:
a) dividends, interest, and capital gains from a company in Cyprus/the United States;
b) real estate in Spain and the income from its rent or sale;
c) the balance of your bank and brokerage accounts, cryptocurrencies, etc.
What is the main eligibility requirement?
The annual gross salary must be at least (2023):
  • € 41 954
  • € 31 891*
    for workers under 30 y.o. with a PhD or master's degree

Now, the 5 myths debunked:

Myth 1:
The 30%-ruling is only available to employed workers. I cannot, for example, come to the Netherlands based on a #startup-visa, set up a BV, become its director (#dga) and obtain a 30%-ruling.
Reality:
The 30%-ruling is also available to expat directors-shareholders of Dutch companies (dga). Sources: here and here (we also personally know such DGAs with a 30% ruling).
Myth 2:
The 30%-ruling is only available to workers with a Dutch employment contract.
Reality:
The 30%-ruling is also available to unemployed whose Dutch resident fiscal partner has a 30%-ruling. Source
Myth 3:
The 30%-ruling is only available to workers who sign a Dutch employment contract before moving to the Netherlands.
Reality:
Workers who move to the Netherlands from outside a 150-kilometer radius of the Netherlands under certain conditions* have eight months to sign a Dutch employment contract after arriving in order to be eligible for a 30%-ruling. Source

*it is a more solid case if you have the employment dated before or on arrival in the NL. If you sign the contract after you arrive in the Netherlands there is a chance that you will have to prove to the Dutch Tax Authority that in the period between your arrival and the signing you haven’t acquired a close connection with the NL. We usually evidence that by showing your bond with the country you have left and by indication the lack of substantial assets in the NL. The mere fact that you already acquired BSN or insurance in the NL before signing the contract doesn’t negatively affect your case. Here is the link to the latest positive case in favor of the taxpayer.
Myth 4:
The 30%-ruling is only available to workers who apply for it within four months from the first day of their employment.
Reality:
The 30%-ruling can be applied for within five years from the first day of your employment, as long as you have met the eligibility requirements both at commencement of the first employment and as of the moment of your application.

Importantly, the new employment shall begin no later than 3 months after the previous employment is terminated.

Myth 5:
The 30%-ruling is only available to workers who work for a Dutch company.
Reality:
The 30%-ruling is also available to workers who work for a foreign company that is registered with the Dutch tax authorities for social security contributions- and income tax withholding. Source
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