Changes to the 30% Ruling per 1 January 2024

What is the 30% ruling tax free facility and who is entitled to receive it

An average of 29,000 migrant workers arrive in the Netherlands every year, including highly skilled migrants for relocation. This is according to the data of the Dutch Central Bureau of Statistics. One of the reasons that attract labor to the country of cheese and wind farms is a special and unique tax benefit for the Netherlands called "Ruling 30 percent". For more reasons to move to the Netherlands, you can also look at 8 Reasons Why Moving to The Netherlands is a Great Idea.

The 30% ruling tax benefit is a special arrangement that allows expats to deduct less income tax from the employee's gross salary under certain conditions. Until the year 2024, employees were entitled to the benefit received a tax-free allowance of 30% of their salary over the course of 5 years. This also includes those who came to the Netherlands on a 'skilled worker visa', but not only (more on visas to the Netherlands and their types in a separate post). Since this is a desirable tax benefit, an orderly application must be submitted to the immigration authorities in the Netherlands.

In recent years, many discussions have been held in the Dutch government regarding the necessity of the benefit and its cost to the Dutch taxpayer. Many called for its cancellation in the face of the resentment of the expats who chose the Netherlands mainly because of it. Finally, a compromise was decided which contains a gradual change in the amount of the benefit by reducing it downward in phases. This change takes effect on January 1, 2024.

New tax benefit changes in 2024

The first amendment to the 30% ruling benefit changed it to a gradual benefit on a scale of 30/20/10% for a maximum of 5 years (60 months). As of today, employees entitled to ruling received a tax-free allowance of 30% of their salary during the entire period of 60 months. In this new amendment, the grading will be in stages that gradually decrease over 5 years, in this way:

From months 1 to 20: Expats do not pay tax on 30% of their income

From months 21 to 40: Expats do not pay tax on 20% of their income

From months 41 to 60: Expats do not pay tax on 10% of their income

From month 60+: Expats pay tax on their entire income

The meaning of the benefit change is of course reflected in the salary of the employees entitled to it. In order to be fair with those expats who are already here in the Neherlands and enjoy the benefit, they decided on a "transition period law". According to this law, employees who requested the ruling before January 2024, will be entitled to the original full benefit.

Who is eligible to 30% ruling?

Within four months after signing your employment contract you must apply for the ruling. The conditions that an employee requesting a ruling arrangement must meet are:

1. For 16 months out of 24 before the first day of work, the employee lives more than 150 kilometers from the Dutch border.

2. The employee's annual gross salary should be higher than €46.107.

3. The employee and the employer agreed to apply the arrangement (important! Note that this is mentioned in the employment contract before you sign).

4. The relationship/contract with the employer is created when the employee lives outside the Netherlands.

5. The employee is a knowledgeable worker with high education who is necessary for the Dutch economy.

* There also are easier salary conditions for ruling (lower salary) for employees with a master's degree under the age of 30, medical interns, doctoral students, and research scientists. In that case the employee's annual gross salary should be higher than €35.048.

The employee is the one who should take care of applying to 30% ruling tax benefit. This is because only a few companies in the Netherlands are allowed to give ruling independently and most companies have to submit a special request to the tax authority. There are a limited number of companies that are authorised to approve a rolling agreement themselves, and the rest of the employers are not happy about additional bureaucracy and paperwork. We at MovingNL can assist you in applying or submit all the paper work for you.

To check eligibility for ruling 30% contact us! 

In our company MovingNL, we are helping you applying to the 30% ruling directly with the Dutch government, we are checking your current and future employment contract, and calculating the financial consequences of this tax benefit. The service includes the translation of authorised documents and notary signatures. 

For more information please contact us here.