Changes to the Dutch 30% ruling for expats - 2025

Proposed changes

Under the Dutch expat tax regime, qualifying expats who have applied for the 30% ruling can benefit from a tax-free compensation of up to 30% of their salary for 5 years. In general, the ruling is applied by reducing the gross salary agreed upon in exchange for a net allowance.

27% ruling

As of 1 January 2024, the 30% facility has been reduced. The new regulations stipulate that the current percentage of 30% can only be applied in the first 20 months. For the next 20 months, the percentage drops to 20%, and for the last 20 months, the percentage will be only 10%. The Tax Plan 2025 proposes to reverse this limitation. Replacing these amendments, as of 1 January 2027, the 30% ruling will be changed to a 27% ruling. For the years 2025 and 2026, the 30% allowance will still apply to all eligible employees. Transitional rules are proposed for employees who were already eligible to receive a 30% ruling allowance in December 2023. They can continue to benefit from the 30% rate until the end of their ruling.

Higher salary criterion

Furthermore, as of 1 January 2027 the salary criterion for the 30% ruling will be increased from € 46,107 to € 50,436, based on the salary standard for a residence permit as a knowledge migrant (2024 amounts; higher indexed amounts will apply in 2027). For incoming employees under 30 with a qualifying Master’s degree the salary criterion will be increased from € 35,048 to € 38,338 (2024 amounts; higher indexed amounts will apply in 2027). Transitional rules are proposed for employees who were already eligible to receive a 30% ruling allowance in December 2024. They can use the old (indexed) salary criteria until the end of their ruling.

With the different transitional rules, the following overview can be created:

Earlier changes that remain in place

In recent years, the following elements of the 30% ruling have already been changed and might be relevant for the coming years as well:

• A cap on the 30% ruling allowance. The 30% ruling for situations after 1 January 2023 can be applied to a taxable salary of up to the ‘WNT salary’ (Standards for Remuneration Act). For 2024, this is €233,000. For existing cases per December 2022, this cap applies only from 1 January 2026. This measure can be relevant for employees with high salaries and additional benefits (bonuses, equity).
• The abolition of partial foreign tax liability as of 1 January 2025. For existing situations per December 2023 (employees who were already eligible to receive a 30% ruling allowance), transitional rules will apply. For them, the abolition will apply as of 1 January 2027. The abolition of the partial foreign liability means that employees living in the Netherlands will be fully taxable in the Netherlands (including box 2 and box 3).

Final remarks

As of 2027 three different “regimes” apply for employees with a 30% ruling. To avoid any unexpected changes, we recommend employers to create an overview of the applicable 30% rulings and inform employees if the reduced rate of 27% or the higher salary criteria will be applicable as of 2027. Upon request, we can provide you with an overview of the current employees, categorized into those who fall under the old regime (i.e., 30% ruling for the whole ruling period) and those who will be subject to different transitional rules.