As an expat moving to the Netherlands, you’ll likely be concerned about managing your finances and taxes while living there. Fortunately, the tax environment in the Netherlands is known for being friendly towards foreigners, with several incentives in place to attract expats to the country’s shores.
Below, we discuss some upcoming changes to the tax incentives in the Netherlands.
The 30 percent ruling
One such incentive is the popular 30 percent ruling, which allows highly-skilled expats to receive tax exemptions on 30 percent of their gross earnings in the Netherlands. This means they are only taxed on 70 percent of their income for the first five years of living in the Netherlands.
There are several requirements to qualify for the 30 percent ruling, including:
- Being employed at a registered company in the Netherlands (self-employed individuals do not qualify), and you must have been recruited from abroad or transferred within a multinational company.
- Living more than 93 miles (150km) from the Dutch border for at least 16 of the 24 months preceding your employment in the Netherlands.
- Possessing specific skills or expertise that are scarce in the Dutch labour market, which is generally assessed based on salary levels and qualifications.
- Earning the minimum gross annual salary, which as of 2024 is EUR 65,868. This threshold is adjusted annually.
Recently, some changes have been made to the ruling, which is set to affect expats moving to the Netherlands. Below, we discuss some changes highlighted in the 2025 Dutch Tax Plan.
The 2025 Dutch Tax Plan
Last year, it was abruptly decided that the 30 percent ruling was to be restricted. The maximum tax-exempt reimbursement of 30 percent would no longer apply for up to 60 months. Instead, after every 20 months, the reimbursement would decrease by 10 percent. So, it would go from 30 percent to 20 percent and eventually down to 10 percent for the last 20 months.
This restriction was immediately met with much criticism; it was seen as disadvantageous to the Netherlands’ business and investment climate and would make for too much administrative hassle. In 2024, the 30 percent ruling was set to be re-evaluated, and there were already suggestions that the restriction might be reversed. And that is precisely what happened in the Dutch Tax Plan 2025.
The previously implemented restriction is being revoked in the 2025 Tax Plans, but unfortunately, the 30 percent ruling will be limited in another way.
The 27 percent ruling
Starting in 2027, the maximum tax-free reimbursement of 30 percent will be reduced to 27 percent. In addition, the income threshold for the 30 percent ruling will be raised from EUR 46,107 to EUR 50,436.
For employees under 30 years old with a master’s degree who are taking advantage of the 30 percent ruling, the income threshold will increase from EUR 35,048 to EUR 38,388. This is a significant increase, which will be indexed annually. Additionally, there is no longer an option to choose partial non-domestic taxation from 2025 onwards.
These measures will result in fewer expats qualifying for the ruling and a decrease in tax-exempt reimbursement. For all expats who already qualified for the 30 percent ruling before January 1, 2024, the maximum tax-exempt reimbursement will remain at 30 percent for the entire duration, and they can opt for partial non-domestic taxation until 2026.
You can contact Suurmond Tax Consultants for assistance with your taxes while living in the Netherlands. They can advise you about tax optimisation possibilities and inform you of the consequences of non-compliance.
This article was supplied by J.C. Suurmond & zn., a Dutch company specialising in expat tax matters. If you have any questions or need assistance managing your tax matters in the Netherlands, get in touch.
