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 Customes Administration.
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.
A number of
conditions will have to be met (different for those with an MSc or PhD):
You were recruited outside The Netherlands (more than 150 kilometres in a straight line from the Dutch border) or you already enjoy the 30% facility.
Your all-in gross salary is over € 53.919 (2019).
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.