The 30% ruling is the single most valuable tax benefit available to expats in the Netherlands, and it has been the most politically contested. Between 2024 and 2026, the structure changed three times — first reducing the maximum duration, then introducing tapering, then partially reversing some of the changes after political pushback. The result is a system that is both still worth using and meaningfully less generous than it was for expats who arrived before 2024.

What the ruling does, briefly

The 30% ruling allows your Dutch employer to pay up to 30 per cent of your salary as a tax-free reimbursement for the "extraterritorial costs" of living and working abroad. The remaining 70 per cent is taxed normally. The net effect is significantly higher take-home pay than a non-ruling expat earning the same gross salary, particularly at higher income levels where the top tax rate of 49.5 per cent applies.

The 2024 changes

Until 2024, the ruling was a flat 30 per cent of salary for up to eight years, then five years after a 2019 reform. The 2024 changes introduced tapering: 30 per cent for the first 20 months, 20 per cent for the next 20 months, and 10 per cent for the final 20 months. The total duration remained 60 months (five years), but the average benefit over those five years dropped from 30 per cent to 20 per cent. For someone earning €100,000 with a five-year horizon, this represented a meaningful reduction in lifetime tax savings — roughly €40,000–€50,000 over the period.

The 2026 partial reversal

Following political pushback from major employers (notably ASML, Philips, and several life-sciences firms) and academic institutions warning that the ruling was no longer attractive enough to retain international talent, the 2026 tax plan (Belastingplan 2026) softened the tapering. The structure is now: 30 per cent for the first 30 months, 25 per cent for the next 30 months. Total duration remains 60 months, but the second half is 25 per cent rather than 20 per cent + 10 per cent. The change applies to applications submitted from 1 January 2026 onward; people already in the ruling under the 2024 tapering schedule remain on that schedule unless they elect to switch (which is generally beneficial and is handled by your employer's payroll provider).

What the salary thresholds look like in 2026

To qualify, you must meet a minimum taxable salary threshold. In 2026, this is €46,107 gross per year for the standard category and €35,048 for employees under 30 with a master's degree. These thresholds are indexed annually and represent the salary after the 30 per cent is taken out — so the gross salary required is roughly 1.43 times these figures (€65,867 and €50,069 respectively).

The 150km rule

You must have lived more than 150 kilometres from the Dutch border for at least 16 of the 24 months immediately before your first day of Dutch employment. This rules out applicants from most of Belgium, parts of western Germany, and Luxembourg. The 150km is measured as a straight-line distance from your home address to the nearest point on the Dutch border, not driving distance. The rule is intended to ensure the ruling goes to genuine international relocations rather than cross-border workers.

Application process and deadlines

Your employer applies on your behalf to the Belastingdienst using the joint application form. The application must be submitted within four months of your Dutch start date for the ruling to apply retroactively to day one. After four months, the ruling can still be granted but only from the month following the application submission, meaning you lose whatever portion of the year falls before that. Applications are typically processed in four to eight weeks.

Partial non-resident taxpayer status

Beyond the tax-free salary portion, holders of the 30% ruling can elect to be treated as partial non-resident taxpayers for Box 2 and Box 3 income. This means foreign-held assets (savings, investments, second homes outside the Netherlands) are not included in the Dutch wealth tax calculation. For expats with significant overseas assets, this is often more valuable in absolute terms than the income tax benefit itself. The election is made annually on your tax return and cannot be retroactively changed.

Strategic considerations

If you are negotiating a Dutch employment offer, the 30 per cent ruling significantly affects how to think about gross salary. A gross salary of €80,000 with the ruling produces roughly the same net income as €100,000–€105,000 without it, depending on family situation. Employers know this and sometimes negotiate gross salaries assuming the ruling is granted. Have a clear understanding with your employer of what happens if the ruling is refused (which is rare but happens) — your net pay would be substantially lower than expected.

Will the ruling survive longer term?

The political consensus around the 30 per cent ruling has softened in recent years. Smaller left-leaning parties have called for its abolition; centre-right and business-aligned parties defend it as essential for talent attraction. The most likely trajectory is incremental adjustment rather than abolition: tighter thresholds, possibly shorter durations, but the basic structure is likely to remain in some form for the foreseeable future. Plan around the current rules and adjust if the law changes.