If you're planning to move to the Netherlands for work or are already living here, you may have heard of the 30% ruling—a tax advantage designed for expatriates. The Dutch government has announced key updates to this tax benefit for 2025, providing more clarity for international professionals. Let's take a closer look at what's changing and what it means for you.

What is the 30% Ruling?

The 30% ruling is a tax exemption granted to highly skilled migrants moving to the Netherlands for work. Under this scheme, eligible expats can receive a tax-free allowance on their salary, which helps offset the cost of living and relocating to the Netherlands. This makes it an attractive incentive for businesses looking to hire foreign talent and for professionals seeking to live and work in the country.

Back to Basics: The 30% Returns

Exciting news for those benefiting from the 30% ruling! The government is eliminating the graduated reduction scheme (30/20/10%) introduced in 2024. Under this scheme, the tax-free allowance would have decreased over time. Instead, expatriates will once again receive the full 30% tax-free allowance throughout 2025 and 2026. This change restores stability and predictability for international workers, helping them plan financially with greater confidence.

New Salary Thresholds

To qualify for the 30% ruling in 2025, you’ll need to meet these updated salary thresholds:

• Standard threshold: €46,660 (for those 30 and older)
• Young professionals: €35,468 (for those under 30 with a master's degree)

These figures have been slightly adjusted compared to 2024, thanks to the annual indexation of salary requirements. Be sure to check if your salary meets the new criteria.

Important Cap Alert

A salary cap is also being introduced. The maximum salary on which the 30% ruling can be applied is €246,000 in 2025. This means that the maximum amount of tax-free income you can receive will be capped at this figure. If your salary exceeds this threshold, only the amount up to €246,000 will be eligible for the tax benefit.

🔑 Key Changes for Current Beneficiaries

If you're currently benefiting from the 30% ruling or started your employment before January 1, 2025, here's what you need to know:

• You’ll continue to receive the full 30% tax-free allowance for the entire duration of your ruling.
• Your salary requirements will adjust annually based on indexation.
• This provides clarity for both current and future recipients, allowing you to plan ahead without worrying about sudden changes to your tax-free allowance.

Partial Non-Resident Tax Status

One important update involves the partial non-resident tax status. This status allows expatriates to be taxed only on their Dutch income, excluding foreign income from taxation in the Netherlands. The Dutch government plans to abolish this option in 2025. However, a transitional arrangement applies:

• Employees who were already benefiting from the 30% ruling before 2024 can still opt for partial non-resident status in 2025 and 2026.
• Starting in 2027, this option will no longer be available for anyone, regardless of when they received the ruling.

This change is important for expatriates who were planning to use or continue using the partial non-resident status, as it offers a tax advantage for foreign income.

Looking Ahead: 2027 Changes

While 2025 brings clarity, the government has outlined some important changes for 2027:

• The tax-free allowance will decrease from 30% to 27%.
• The salary thresholds will rise to €50,436 for employees aged 30 or older, and €38,338 for those under 30 with a master's degree (based on 2024 amounts, subject to indexation)
• The partial non-resident tax status will be fully phased out.

These changes are still a few years away, but they’re important to keep in mind as they will affect how the ruling applies in the future.

The Dutch tax system can be complex, and everyone’s situation is different.