In this leaflet we provide you with an overview of the key aspects of the Dutch 30% ruling for inbound expatriates (hereinafter “30% ruling”).

General

The 30% ruling is a Dutch wage tax facility which allows expatriates to receive up to 30% of their gross salary from current employment tax-free. This facility is available to expatriates who are either recruited from abroad or assigned to work in the Netherlands and who qualify as inbound employees. In order to meet the distance requirement, the employee must have lived more than two-thirds (16 months) of the 24-month period prior to the employment at a distance greater than 150 kilometres from the Dutch border. 

To qualify, the employee must be recruited or assigned from abroad, the employer must be registered in the Netherlands as a withholding tax agent, and the employee must have specific expertise that is scarce or unavailable in the Dutch labour market. Specific expertise is deemed present if the employee’s salary meets the minimum threshold of €46,660 per year in 2025, or €35,468 for employees under 30 years old with a qualifying university master’s degree.

Application

To apply for the 30% ruling, several documents must be submitted to the Dutch Tax Authorities, including a completed application form, the employee’s citizen service number (BSN), full residential address, CV, and date of arrival in the Netherlands. If the employee is under 30 and wishes to qualify under the lower salary requirement, a copy of the relevant master’s degree and evidence that it meets Dutch university standards must also be included. Furthermore, if the application is submitted by a third party, signed powers of attorney from both the employee and the employer are required.

Proof of residence outside the Netherlands

To determine whether the employee was living abroad at the time of signing the employment contract, additional documentation should be submitted. This includes evidence that the contract was signed before arrival in the Netherlands, monthly bank statements for the 24 months prior to arrival (one page per month is sufficient), a marriage certificate if applicable, a residence and work permit for non-EU nationals, a Dutch rental or purchase agreement, and a valid ID document such as a passport or ID card.

Application, timelines and 30% ruling decision

The 30% ruling must be applied for jointly by the employer and the employee and submitted to the tax office in Heerlen within four months of starting work in the Netherlands. If submitted later, the ruling will only apply from the first day of the month following submission. The ruling may be applied as of the decision date or, if applied in anticipation, adjustments may be necessary in the case of denial, including payroll corrections and potential tax recovery from the employee.

Duration of the 30% ruling

The benefit of the 30% ruling can be granted for a maximum of five years. Any earlier periods of work or residence in the Netherlands within the 25 years prior to the current employment will reduce this maximum period. The employee must therefore complete part 4 of the application form, providing information about previous periods of residence, work, or physical presence in the Netherlands for either professional or personal reasons, including any prior Dutch-law employment while residing abroad.

Changing jobs

If the employee changes jobs, it is possible to maintain the 30% ruling. A new employment agreement must be in place within three months of termination of the previous employment, and a new joint application must be submitted within four months of starting the new job for it to apply retroactively.

Addendum to the employment agreement

When applying for the 30% ruling, it is strongly recommended to include a clause or written addendum to the employment contract explicitly stating that the gross salary will be reduced by up to 30% in accordance with Dutch wage tax legislation. Note that a reduction in gross salary may also result in lower pension accrual and lower social security entitlements, such as unemployment or disability benefits.

30%-ruling cap

As of January 1, 2024, the 30% ruling benefit is capped. From this date, employers may only reimburse up to 30% of income tax-free up to the WNT norm, also known as the ‘Balkenende standard’. For 2025, this maximum tax-free amount is €73,800 per year, calculated pro rata if the employee does not work a full year in the Netherlands.

Announced changes per 2027

As of January 2027, the 30% tax-free allowance will be reduced to 27%. The minimum required salary will also be increased to €50,436 per year, or €38,388 for employees under 30 with a qualifying master’s degree. These changes only apply to new users of the 30% facility from January 1, 2024, onward. Individuals who were already using the ruling before this date will remain unaffected and continue receiving the 30% tax-free benefit during the term of their granted ruling.

Partial non-resident taxpayer status

Up until 2024, employees under the 30% ruling could opt to be treated as partial non-resident taxpayers for Dutch income tax purposes. This allowed them to be considered non-residents for income from substantial interest (Box 2) and from savings and investments (Box 3), meaning they only had to declare Dutch-source income and not worldwide income in those categories. This option was abolished from 2025, but transitional rules allow those who already used the option before 2024 to continue doing so until December 31, 2026.

For U.S. nationals and Green Card holders, opting for partial non-resident status meant being treated as a non-resident under the U.S.-Netherlands tax treaty, resulting in tax liability in the Netherlands only for Dutch workdays and specific Dutch-sourced income. The choice must be made annually in the Dutch income tax return and only applies to individuals under the transitional regime.

More information?

Should you have any comments or questions, or if you require assistance, please contact your trusted RSM advisor.