The Dutch Government’s Plans for the 30% Ruling: What’s Changing?
On Budget Day (or ‘Prinsjesdag’), the Dutch cabinet unveiled its plans for significant changes to the 30% ruling, an important tax benefit for highly skilled expats in the Netherlands. The planned changes will be rolled out in several phases, impacting both employers and employees.
Here’s a breakdown of the upcoming changes:
- Reversal of Planned Reductions (2024):
The proposed reductions to gradually lower the 30% ruling to 20%, and then 10%, by 2024 have been revoked. This is positive news for both employers and employees, as the ruling will remain at a maximum of 30% through 2025 and 2026 without any gradual reductions. - Reduction to 27% (2027):
As of 1 January 2027, the maximum benefit of the 30% ruling will be reduced to 27%, which will apply for the entire validity period of the ruling. - Salary Norm Increases:
From 1 January 2025, salary thresholds for eligibility will increase more than the usual annual indexation. The regular salary norm will rise from €46,107 to €50,436. For employees under 30 with a Master’s degree, the threshold will increase from €35,048 to €38,338. After this, regular annual indexation will be based on these higher amounts, meaning fewer employees may qualify for the benefit. - Transitional Rules for Existing Employees:
Employees who have already applied for and are using the 30% ruling before 2024 will keep the 30% benefit and the former salary norms (with annual indexation) for the entire validity period of their ruling. - Legislative Process:
While the cabinet is planning to implement these changes as of 1 January 2025, they must still be passed through both houses of parliament, so these changes are not yet set in stone.
These upcoming changes to the 30% ruling will have a significant impact on both employers and employees in the Netherlands. The reversal of the initial reductions is a positive step, but the long-term reduction and higher salary norms will bring challenges for new applicants.
For more information or assistance in navigating these changes, feel free to contact Eres Relocation Netherlands with any questions or concerns.
