Higher net pay and/or lower employer charges
The 30% ruling is a very advantageous ruling and provides a higher net salary by allowing a tax-free reimbursement of up to 30% of an employee’s gross salary. The 30% ruling is granted for a maximum of 5 years.
Both resident and foreign taxpayers can benefit from the 30% ruling if they meet the conditions. If the employer decides to pay the employee a net guaranteed salary, the employer can save costs through lower employer charges.
Less (or no) tax on wealth
Someone who is considered a resident of the Netherlands for tax purposes is also known as a resident taxpayer. A resident taxpayer of the Netherlands is basically taxed on world income according to the Dutch tax system (box 1, 2 and 3). If the 30% ruling is granted, a resident taxpayer can opt to be treated as a partial foreign taxpayer. As a result, the taxpayer is treated as a foreign taxpayer for box 2 and box 3 and is therefore exempt from wealth tax (except for Dutch real estate, not being the principal residence). Persons with U.S. citizenship or in possession of a valid U.S. Green Card are additionally treated as foreign taxpayers for box 1.
Easy driver’s license exchange – no exam required
Finally, there is another advantage that is mainly of a practical nature. Someone who comes to live and work in the Netherlands with a foreign driver’s license may only drive in the Netherlands for a limited time (in most cases a maximum of 6 months with a valid foreign driver’s license). After that period, in many cases it is mandatory to take a Dutch driving test to obtain a Dutch driver’s license. However, if a person is granted the 30% ruling, it is possible to exchange the foreign driving license for a Dutch driving license without a driving test. This also applies to all family members registered at the same address as the holder of the 30% ruling. This saves time and money for the taxpayer and the partner and/or children.
