Important update to the 30%-Rule this 2025

The Dutch Senate has recently approved the Tax Plan 2025, which introduces significant changes to the well-known 30%-Rule — a tax benefit designed to attract highly skilled workers from abroad. These updates, set to take effect over the coming years, aim to reshape the application and scope of this tax regime. Please find below a breakdown of what the changes mean for employees and employers.

Changes to the 30%-Rule per January 1, 2027 and the abolishment of the 30/20/10%-rule

The 30/20/10%-Rule regime, which had been introduced as a replacement for the traditional 30%-Rule, will no longer be implemented. Instead, the existing 30%-Rule will continue to apply until January 1, 2027. After this date, a new framework will take effect, reducing the maximum tax-free percentage to 27% and introducing stricter salary norms for eligibility.

These changes will create three distinct categories of 30%-Rule holders, each with unique implications based on when they first started benefitting from the regime.

The 3 categories of 30%-rule holders

The changes to the 30%-Rule divide employees into three categories:

1. Pre-January 1, 2024, 30%-Rule Holders
   Employees who commenced utilisation of the 30%-Rule on or before 31 December 2023 will retain the 30% tax-free allowance and the prevailing salary requirements for the duration of their tenure. These employees will not be impacted by the impending changes.
2. January 1, 2024 – December 31, 2024, 30%-Rule Holders
   Employees who begin benefiting from the 30%-Rule between 1 January and 31 December 2024 will continue to follow the current salary requirements throughout their ruling. However, it should be noted that their tax-free allowance will drop from 30% to 27% with effect from 1 January 2027.
3. Post-December 31, 2024, 30%-Rule Holders
   Employees whose 30%-Rule starts on or after 1 January 2025 will see their tax-free allowance reduced from 30% to 27% with effect from 1 January 2027. In addition, they will be required to meet stricter, higher salary requirements from that date onwards.

Please note the following key points regarding the 30% rule

1.    Abolition of the Partial Non-Resident Taxpayer Status

As of 1 January 2025, the partial non-resident taxpayer status will be abolished. Currently, 30% ruling holders can opt for this status, which exempts them from taxation on certain income categories. With its removal, affected employees will be taxed as full residents on all income sources. However, employees who are currently using the 30% ruling as of December 31, 2023, will be able to continue to benefit from the partial non-resident status until December 31, 2026, provided that there are no interruptions in their employment.

2.    Cap on Tax-Free Allowance

As of January 1, 2024, a cap on the tax-free allowance under the 30% ruling was introduced, linked to the ‘Balkende norm,’ which is indexed annually. For 2025, the norm is set at EUR 246.000,00. This means that the maximum tax-free allowance is EUR 73.800,00 (30% of EUR 246.000,00). Employees who were already benefiting from the 30% ruling as of 31 December 2022 can utilise transitional provisions until 1 January 2026, assuming continuous employment.

3.    Procedural Changes for 30% Ruling Applications

As of 1 January 2025, pro-forma requests for the 30% ruling must be completed within twelve months of submission to the Dutch tax authorities to ensure retroactive application from the employment start date. Failure to meet this deadline will result in the tax benefit commencing from the first day of the month following the submission of the complete application.

*The revised salary thresholds outlined in the Tax Plan 2025, effective January 1, 2027, are set at €50,436 and €38,338. These updated amounts are calculated using 2024 price levels, with the inclusion of the previously announced 1.2% indexation for 2025. The indexation for 2026 is expected to be announced in autumn 2025, while the 2027 indexation will likely follow in autumn 2026.

Conclusion

The Tax Plan 2025 introduces significant changes to the 30% ruling, affecting both current and future beneficiaries. It is imperative that employers and employees review these developments to understand their implications and ensure compliance with the new regulations. We recommend consulting a tax professional for personalised advice.

If you are a highly skilled professional looking to move to the Netherlands or an employer seeking to hire international talent, it is vital to understand these updated salary guidelines to ensure compliance with IND regulations.

Should you have any questions or require assistance with hiring a foreign employee, highly skilled migrant or expat international professional, please do not hesitate to contact us. Feel free to contact us or leave your contact details and we will get back to you as soon as possible!