November 6, 2023

Foreign workers that move to the Netherlands from another country for work can benefit from the 30% ruling if they meet certain conditions. This entails that 30% of the employee’s salary will be exempted from income tax. Currently, eligible employees can benefit from this ruling for 5 years.

On 26 October, the Dutch House of Representatives approved the legislative proposal to reduce such benefits starting from January 2024. In detail, 30% of the salary will be exempted as usual only for the first 20 months. During subsequent 20 months, 20% will be exempted and 10% will be exempted during the next 20 months. Therefore, the duration during which the employee enjoys tax benefits will remain the same (5 years), but the proportion of the salary that is exempted will decrease gradually according to this plan.

The proposal only concerns new employees coming to the Netherlands from 2024. Eligible employees that already enjoyed 30% ruling in 2023 will continue to enjoy the benefits according to the current regime.

The Dutch Senate is set to vote on this proposal in December. The proposal will be fully effective from January 2024 if approved by the Senate.

Please, Contact CIS Management for further information.