THE 30% FACILITY

When an employee is hired from abroad to work in the Netherlands, they may be eligible to receive a tax exemption known as the 30% facility (or 30% ruling).

This tax-free allowance is considered a compensation for extra costs that an employee may incur for working outside their home country, the so-called extraterritorial costs.

If a number of conditions is met, your employer can apply for your 30% facility at the Dutch Tax and Customs Administration. A full explanation of the 30% facility with all conditions and exceptions can be found on the website of the Dutch Tax and Customs Administration.

If this facility is granted, 30% of your gross salary will be paid to you without tax deduction. You will only pay tax on 70% of your gross salary. The 30% ruling can be applied to a maximum salary of € 233.000 per year (2024).

A number of conditions will have to be met (different for those with an MSc or PhD):

• You were recruited whilst living outside The Netherlands (more than 150 kilometers in a straight line from the Dutch border) or you already enjoy the 30% facility.
• Your all-in gross salary is over € 65.868 (2024).

After the application for the 30% facility has been submitted, it takes 9 to 12 weeks to receive the decision of the Dutch Tax and Customs Administration. Upon receiving a positive decision the 30% facility will become effective retroactively.

Employees with a positive 30% ruling dated before 1st January 2024 are entitled to a tax-free compensation of their salary of 30% during the first 5 years of employment.

As of 1st January 2024 the 30% ruling entitles employees to the following tax-free compensation¹:

• 30% over the first 20 months of employment;
• 20% over the next 20 months of employment;
• 20% over the next 20 months of employment.

1. A motion has been filed and accepted to revisit this solution in the Tax Plans for 2025, due to criticism on the intent to move away from the full 30% compensation during 5 years. ↩︎