Tax Incentives for Working in the Netherlands

Is finding employment in the Netherlands the next step on your career path? The Netherlands has job vacancies for expatriates with specific skills in many fields, especially in the services and trade, logistics, and information and telecommunication sectors. If you are an EU/EEA citizen, you do not need a work permit to take up employment in the Netherlands. Citizens of all other countries do require a work permit.
To find a job you can utilize the resources offered on werk.nl, a Dutch job portal hosted by the UWV (the Employee Insurance Schemes Implementing Body) and on EURES, the European Job Mobility Portal. Alternatively, you can enlist the services of a private employment agency or search in local newspapers such as De Telegraaf, De Volkskrant, Haagsche Courant or Algemeen Dagblad. It’s useful to have at least basic proficiency in the Dutch language, and fluency in English is a must.

Once you’ve found a position and been offered the job, it’s time to negotiate your contract. For well-paid jobs in the Netherlands, it’s important to know about the 30% ruling. Personal income tax can reach up to 52% in the Netherlands, but with the 30% ruling, you could find yourself only having to pay 36.4%.
The 30% ruling is a tax incentive that was created to reimburse highly qualified expatriates employed in the Netherlands for the “extraterritorial expenses” they may face due to living and working outside of their native country.

According to the 30% ruling, if you meet certain requirements, you may be eligible to claim 30% of your salary as a tax-free reimbursement. The main requirement is that your gross taxable salary must be at least €35,000 even after the tax-free reimbursement has been deducted. So to take full advantage of the 30% ruling, your initial salary must be at least €50,000. If your initial salary is between €35,000 and €50,000, you have the option of receiving less than 30% of your salary as a tax-free reimbursement in order to stay over the €35,000 gross taxable salary threshold.

Please note that lowering your taxable income will also lower the amount of unemployment or disability benefits you are eligible for. For this reason, it is mandatory that both you and your employer agree in writing that you will be receiving this tax-free reimbursement. This should be included either as a clause in your employment contract or as an addendum.

You must be an employee to take advantage of this tax benefit. However, if you are self-employed, you have the option of establishing a UK Limited Company or Dutch B.V. and setting yourself up as an employee.

You can take advantage of this special tax incentive for a maximum of eight years.
If you have any questions about the 30% ruling or other possible tax benefits, you should contact a professional tax consultant for tax advice, if possible before signing your contract.

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