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Income tax for foreigners in the Netherlands

Posted in Netherlands forum

A friend of mine told me that income tax for foreigners in the Netherlands is limited to 30% for up to 10 years. However, I find this hard to believe as the Dutch income tax goes up to more than 50% from what I heard. This would mean that foreigners in Holland actually pay less income tax than the Dutch (which sounds a little insane). Does anyone have any further information on this?

  • Go to Massimiliano Adamo's profile

    posted by  in Netherlands forum 

    a football player, earning millions of euros, is a highly skilled person that cannot be found in the country?
    Can he benefit from the 30% rule?
    If the answer is yes.... what can I say? Oh My God?
    maybe not.... they do not have monthly salary, normal contract with paid leave and so on. They are probably paid in a different way. I hope so.

  • 30% ruling

    posted by Deleted user in Netherlands forum 

    Hi all,

    It is true everything about 30% Ruling... I am working in Amsterdam and I have this compensation.... it is not for everybody .. my company requested it for me .. you have to proof that you were living in other country before coming here and that you have special skills difficult to find in the Netherlands.

    In my opinion it is not unfair or it is not just for rich people it is just a compensation for leaving your country and your familiy

  • Go to Massimiliano Adamo's profile

    posted by  in Netherlands forum 

    Hi all,

    this discussion thread is pretty old... anyway... I made few calculation and this "30% rule" seems a bit crazy but it's not.
    First of all, the difference is just small for an average salary. And if you have a low income you better no apply at all, as you'll pay more. If you earn €32thousand per year, you'll pay only 10%... and ONLY for the exceeding part you'll pay 42%.
    I think starting from 40k you can benefit from the 30% rule.
    The difference is huge if you have a really high salary, because after €54k you'll pay 52%.
    From one side it seems that they are favoring reach people, but indeed, in line with the principle of this rule, they are favoring highly skilled specialist, that cannot be easily found in the country. And of course, a really highly specialized person needs to be paid more than 54k € per year.....

    Anyway, I think any of you knows as "Progressive taxation" works: you don't pay 50% for all your income. You pay 50% only for the exceeding part ... that's it.

    cheers
    Massimiliano

  • posted by  in Netherlands forum 

    Hi Ingrid, I found this info:

    The 30 Percent Ruling is a personal income tax reduction for select employees in the Netherlands. It applies to specialized foreign employees who are brought to the Netherlands because their skills are scarce in the Dutch marketplace.

    The purpose of the 30 Percent Ruling is to compensate employees for the extra costs of their temporary stay in the Netherlands, e.g. to make Holland competetive in the international marketplace for skilled labour, since normal Dutch income tax rates are so high that it is not financially rewarding to work in Holland. However, there are consequences for possible future unemploiment aid, tax deduction for a morgatge and other aids.

    The 30 Percent Ruling allows an employer to pay an employee a tax-free allowance of up to 30 percent of the employee's total remuneration (the "Basis") for the first 10 years of their stay in the Netherlands. In addition, the employer may provide a tax-free reimbursement of the fees paid for the employee's children to attend an international school.

    A similar ruling also applies to compensate Dutch employees who are assigned to work in designated developing countries.

    Note that it typically takes two to three months from the application for the ruling to be granted. The excess tax paid in the meantime is repaid to the applicant once the ruling is granted.

    Regards
    Jan

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