The 30% ruling is an attractive tax facility for employees who come to the Netherlands from abroad to work. This scheme allows employers to pay 30% of the salary tax-free as compensation for the additional costs of working in another country. Specific exceptions apply within this scheme for PhD graduates and scientific researchers. In this article, we outline the key conditions and exceptions.
General conditions for the 30% ruling
To qualify for the 30% ruling, an employee must meet the following conditions:
- Recruited from abroad: The employee must have been recruited by the employer from abroad. This means that the employee must have lived at least 16 of the 24 months preceding the first working day in the Netherlands at a minimum distance of 150 kilometers from the Dutch border.
- Minimum taxable salary: The employee must have a taxable salary above a certain threshold. In 2024, the thresholds are:
- EUR 46,660 per year for regular employees.
- EUR 35,468 per year for young academics (employees under 30 years old with a master’s degree from a scientific institution).
Exceptions for PhD graduates
For employees with a PhD degree, there are several important exceptions to the standard conditions:
- Exemption from the 150 km rule: If an employee starts working in the Netherlands within one year of obtaining their PhD, any stay in the Netherlands or within 150 km of the Dutch border will not be considered in determining residency eligibility.
- No age reduction: PhD graduates older than 30 years can still qualify for the scheme, but they must meet the higher salary requirement of EUR 46,660 per year.
Exception for scientific researchers
For employees working as scientific researchers at a government-recognized research institution, an additional exemption applies:
- No salary threshold: There is no minimum salary requirement for employees who take up employment at a research institution designated as such by the Dutch government. The employer must be registered as a recognized scientific institution with the Immigration and Naturalisation Service (IND).
What does this mean in practice?
If you or your partner is considering working in the Netherlands and may be eligible for the 30% ruling, it is crucial to understand all conditions. Suppose your partner recently obtained a PhD in Finland and is looking for a job in the Netherlands. If they find a position within one year of graduating, they do not need to meet the requirement of having lived outside the Netherlands for 16 of the 24 months. This is a significant advantage for PhD graduates who wish to start their careers in the Netherlands immediately.
Additionally, salary plays a key role. If your partner is over 30 years old, their taxable salary must be at least EUR 46,660 per year to qualify for the 30% ruling. However, if they start working at a recognized research institution, there is no minimum salary requirement, allowing them to still benefit from the ruling. This provides extra flexibility for scientific researchers who may not immediately meet a high salary threshold.
For employers, offering the 30% ruling can be a crucial factor in attracting international talent. It not only reduces the tax burden for the employee but also makes the Netherlands more attractive as a destination for highly skilled professionals. Are you an employer considering hiring an international employee? Then it is essential to assess in advance whether the employee meets the conditions and whether the ruling adds value to your salary package.
Additionally, the scheme can be combined with other tax benefits, depending on the specific situation of the employee. A correct and timely application is crucial, as the ruling must be applied for within four months of the start of employment to be applicable from the first working day. Missing this deadline may result in the ruling taking effect later or even being denied entirely.
In summary, the 30% ruling offers significant benefits for expats and employers, but its application requires careful planning and tax expertise. By conducting a thorough analysis of the individual situation and tax possibilities in advance, you can maximize the benefits of this ruling.
Frequently Asked Questions (FAQ)
1. What is the 30% ruling in the Netherlands?
The 30% ruling is a tax benefit that allows employers to grant 30% of an employee’s salary tax-free to cover extra costs incurred due to working in the Netherlands.
2. Do PhD graduates qualify for the 30% ruling?
Yes, PhD graduates can qualify for the 30% ruling. If they start working in the Netherlands within a year of obtaining their PhD, they do not need to meet the 150 km residency rule.
3. What is the minimum salary required for the 30% ruling?
Regular employees must earn at least EUR 46,660 per year. Young academics (under 30 years old with a master’s degree) need a minimum salary of EUR 35,468 per year.
4. Is there a salary threshold for scientific researchers?
No, employees working at a recognized research institution do not need to meet a minimum salary requirement.
5. How long does the 30% ruling apply?
The 30% ruling is valid for a maximum of five years, provided that the employee continues to meet the conditions.
6. How can I apply for the 30% ruling?
Your employer must apply for the 30% ruling with the Dutch Tax Authorities. This must be done within four months of starting employment for retroactive effect.
How Practical can support you
Practical | Excellence in Finance has extensive experience in assisting expats and employers with the application process for the 30% ruling. We help you assess whether you qualify for the scheme and ensure a smooth application with the Dutch Tax Authorities. Additionally, we provide comprehensive tax advice and financial guidance to ensure you fully benefit from the ruling. Besides assistance with the 30% ruling, we also offer bookkeeping and accounting with the Yuki software package, making your administration efficient and transparent. You can also rely on us for tax advice, payroll administration, and financial advice. With offices in Amsterdam, Eindhoven, Rotterdam, and Utrecht, we support entrepreneurs across the Netherlands, providing real-time financial insights to facilitate fact-based decision-making.
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