What is 30% Ruling (30%-Regeling)?

The 30% ruling (30%-regeling) is one of the best-known and most-valued incentives in Dutch employment law. It makes the Netherlands significantly attractive for international talent recruitment and is widely used in the technology, finance, and research sectors.

**How it works**

Instead of reimbursing actual relocation and extraterritorial costs, the ruling creates a lump-sum tax-free allowance of 30% of the agreed gross salary. The remaining 70% is taxed normally under Box 1 income tax rates. The employer pays 30% of the salary as a tax-free component on top of (or included in) the agreed compensation, depending on the employment agreement.

**Eligibility conditions**

1. The employee must be recruited from outside the Netherlands (or returning Dutch nationals who lived abroad for more than 2.5 years) 2. The employee must have lived more than 150 km from the Dutch border during at least 16 of the 24 months before starting work in the Netherlands 3. The employee must have specific expertise that is scarce in the Dutch labour market (the salary threshold test: EUR 46,660 excluding the 30% component in 2025) 4. The employer and employee apply jointly to the Belastingdienst within 4 months of the first day of employment

**Duration and phasing**

The ruling can last up to 60 months (5 years). The 60-month period includes any previous 30% ruling periods in the Netherlands if the employee worked in the Netherlands before.

Note: the Dutch government proposed reducing the rate from 30% to 27% in the second and third 5-year periods starting January 2027. As of June 2026, the 30% rate still applies in full for the entire 60-month period, but businesses should monitor legislation for updates.

**Application process**

Application is submitted to the Belastingdienst. Both employer and employee sign. The Belastingdienst typically processes applications within 8-12 weeks. The ruling is granted from the start date of employment if applied within 4 months.

**Partial non-resident tax option**

Employees using the 30% ruling can elect partial non-resident status (partieel buitenlands belastingplichtige) for Box 2 and Box 3 purposes. This means foreign assets (e.g., shares in a non-Dutch company) are generally not taxable in the Netherlands, which is highly advantageous for founders with foreign equity.

**End of the ruling**

At month 61, or earlier if the employee changes employer (without transferring the ruling), the 30% benefit ends. All salary reverts to being fully taxable under Dutch Box 1 rates. Employees and HR teams should plan for the significant take-home pay reduction at this point.