How the Netherlands Expat Tax Ruling Works
The Dutch government is moving forward with plans to scale back the 30% tax-free allowance for high-skilled migrants. This change will reduce the net income of eligible foreign workers and impact long-term financial planning for expats in the Netherlands.
How the Netherlands Expat Tax Ruling Works
The Netherlands offers a significant tax break known as the 30% ruling to attract highly skilled workers, but the landscape is shifting. This "expat facility" allows eligible employees to receive up to 30% of their gross salary tax-free to cover relocation and housing costs.
While the program is a major draw for the Dutch labor market, recent legislative changes have introduced a tapering system. For those starting now, the full 30% benefit remains in place through 2026. However, starting January 1, 2027, the rate is scheduled to drop to a flat 27% for both new and existing recipients. Additionally, a salary cap of €233,000 limits the total tax-free allowance for high earners.
Who is affected
This ruling is strictly for highly skilled migrants recruited from abroad who meet specific salary thresholds. For 2024, the minimum gross salary required is €46,107, though this is lower for those under 30 with a master’s degree.
It is important to note that this is an employment-based benefit. It does not apply to:
- Self-employed digital nomads
- Short-term travelers or tourists
- Freelancers without a Dutch payroll contract
If you are a remote worker moving to the Netherlands on a nomad news update, you must be hired by a Dutch employer to qualify.
What to do
To secure the allowance, your employer must apply through the Dutch Tax Administration (Belastingdienst) within four months of your start date to make the benefit retroactive. You must prove you were recruited from at least 150km away from the Dutch border and have not lived in the Netherlands recently.
Keep in mind that the "partial non-residency" status, which previously exempted expats from taxes on worldwide assets, ended on January 1, 2025. Any global wealth is now subject to standard Dutch taxation. If you are planning a move, ensure your employment contract explicitly mentions the ruling and account for the 3% reduction in net pay coming in 2027.
Read our full Netherlands guide for the complete picture.