Factsheet for measure
NL-2024-1/3800
– measures in Netherlands
Scaling back the 30% ruling for foreign highly-skilled workers
Afbouwen 30%-regeling voor buitenlandse werknemers in Nederland
Background information
The 30% tax ruling in the Netherlands allows employers to offer highly skilled foreign employees a tax-free allowance of up to 30% of their salary to compensate for additional expenses incurred while working abroad, such as relocation and housing costs. This policy aims to attract international talent to the Dutch labor market. However, to address budgetary considerations and ensure the policy's sustainability, the Dutch government has implemented changes to the ruling effective from 1 January 2024.
Content of measure
Effective from 1 January 2024, the Dutch 30% ruling – a tax exemption designed to attract highly skilled workers from abroad – is being gradually phased down in duration and generosity. Under the revised scheme, employers may grant 30% of an expatriate’s gross salary tax-free for only the first 20 months of employment. This decreases to 20% for the next 20 months, and then 10% for the final 20 months, totaling a maximum of five years. Additionally, employers are now required to report annually on the employee's continued eligibility. Employees who already made use of the 30% ruling before 1 January 2024 are subject to transitional arrangements, preserving the full benefit temporarily. The measure seeks to reduce fiscal expenditure, ensure fairer treatment of domestic and foreign workers, and improve oversight. It applies across sectors, with notable relevance for industries reliant on international talent, such as technology, finance, academia, and engineering.
Use of measure
As of 2022, around 86,000 expatriates in the Netherlands were making use of the 30% ruling, according to Dutch Tax and Customs Administration data. The updated regime will affect both current and future recipients, depending on their eligibility and starting dates
Target groups
Actors and funding
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Actors
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Funding
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National government
Company / Companies
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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|
Role
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Unknown
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Consulted
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Form
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Not applicable
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Unknown
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Social partners' role in the
implementation, monitoring and assessment phase:
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Social partners jointly
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Main level of involvement: Peak or cross-sectoral level
Involvement
The measure has been discussed in various stakeholder fora. Employers' organisations, such as VNO-NCW, have voiced concerns over the competitiveness impact. Trade unions have been less vocal, though some noted concerns over unequal treatment between domestic and foreign workers.
Views and reactions
Employers' organisations are critical of the shortening, citing concerns about talent attraction and international competitiveness. They argue it undermines the Dutch position in the global labour market. Trade union responses have been mixed, with some support for reducing the duration but calls for broader reform of tax advantages.
Sources
