The 30% rule (also known as, "The 30% tax ruling") applies to international employees that move to The Netherlands for work. The essence of the 30% rule is that the employee has their annual salary reduced by 30%. However, these funds are provided in the form of an expenses package that is not taxed.    This can be used to find accommodation for example, so the employee is not out of pocket. Meanwhile, the reduced salary theoretically means that the employee pays less income tax, and the employer is liable for lower social security payments. The 30% rule is optional, not obligatory.   Not everybody is eligible for the 30% rule. The following restrictions are applied:   • Only permanent employees can take advantage of the 30% rule – freelancers and the self-employed are not eligible. However, if you set up a BV and employ yourself as a Director, you can benefit from the 30% rule • Agreement to the 30% rule must be made in writing by employee and employer alike • The employee must have moved to The Netherlands exclusively for the role in question • The employee cannot have lived and/or worked within 150km of the Dutch border for longer than eight months over the last two years. This means employees that previously lived and worked in Kent, Luxembourg, Belgium Eastern Germany or Northern France will not qualify for the 30% rule • The role must be relevant to the experience and expertise held by the employee, and the employee must perform duties that cannot easily be completed by a Dutch national. Employers will likely need to prove that they tried, and failed, to hire a local employee before looking overseas  • The employee’s gross salary must be €38,961 or above after the reduction of 30% (€50,568 before the reduction) unless they hold a Master's degree and are aged 29 years and eleven months or younger. In this case, the minimum salary is reduced to €29,616 (€38,500 before the reduction). There is no minimum wage for trainee doctors or scientific educators to qualify for the 30% rule   Once agreed, the 30% rule is active for five years at a time. The qualification criteria are reviewed every January though. If your circumstances mean that you no longer qualify for the 30% rule, such as a salary failing to reach the minimum threshold, your ability to claim this tax relief will be revoked.