The Dutch 30% ruling is a tax facility for employees who move to the Netherlands from abroad for work. It allows employers to grant a tax-free allowance to compensate for additional costs related to working and living in another country.
How does the ruling work?
Under the 30% ruling, an employer may pay up to 30% of the employee’s gross salary tax-free. This amount is considered compensation for extraterritorial expenses, such as relocation costs, housing expenses, and higher living costs.
Change: from 30% to 27%
The ruling is being amended. For employees who start applying the ruling on or after 1 January 2024, the following applies:
- In 2024, 2025 and 2026, the maximum tax-free allowance remains 30%.
- From 1 January 2027, the maximum allowance will be reduced to 27%.
Employees who already applied the 30% ruling before 1 January 2024 will generally retain the 30% allowance for the remainder of their ruling period (up to five years).
Income requirements
To qualify for the ruling, the employee must meet a minimum salary threshold. This income requirement is adjusted periodically and ensures that the ruling applies only to employees with specific expertise that is scarce on the Dutch labour market.
If you have any questions about your income or the application of the Dutch 30% ruling (27% ruling), please feel free to contact us. At TaxAble, we are happy to assist you with personal and professional advice.
Besides the impact on income, the 30% ruling also has important consequences for the taxation of assets in Box 3, particularly due to the abolition of the partial non-resident taxpayer status. You can read more about this here: https://taxable.nl/news/other-tax-news/expat-regime-30-ruling-and-box-3/
