30%-Ruling Netherlands to Be Reinstated

The gradual reduction to 10% will be reversed. A new flat-rate of 27% is expected, along with higher salary norms and new transitional rules from 2025.

IThe 30%-ruling Netherlands is back in focus. After widespread pushback from the business community, the Dutch government will reverse its earlier decision to scale back the popular tax facility.

Starting in 2025, incoming employees can again receive up to 30% of their salary tax-free under the 30%-ruling, a key benefit used to attract international talent to the Netherlands. This reversal comes after research by the Ministry of Finance confirmed that the original reduction plan had a negative effect on the Dutch business climate and significantly increased administrative complexity.

Looking ahead, a new 27%-ruling will take effect in 2027. From that date, incoming employees will qualify for a 27% tax-free allowance on income up to the capped wage of €246,000. At the same time, the salary thresholds to qualify for the scheme will increase, making it slightly harder to meet the criteria.

Current and recent users of the 30%-ruling will benefit from transitional rules. If you applied before 2024, the 30% benefit will continue for the full duration. If you applied in 2024, the new 27% rule will apply from 2027, but you’ll keep the current salary norm. New applicants in 2025 and beyond will be fully subject to the new rules and salary thresholds.

Employers and payroll professionals should review internal processes now to prepare for these changes. Although the reversal of the scaling-back is welcome, the new rules still require attention and planning.

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