The 30% ruling
The 30% ruling (from 2027: the 27% ruling): what it is, conditions and changes
Anyone recruited from abroad to work in the Netherlands in a role requiring scarce expertise may qualify for the best-known tax facility for incoming employees: the 30% ruling, commonly called the expat scheme. The idea behind it is simple. An employee who comes to work in the Netherlands temporarily incurs extra costs of living outside their country of origin, the so-called extraterritorial costs, and the ruling reimburses these on a flat-rate basis. Under conditions, the employer may pay out up to 30% of the employee's salary from current employment free of tax, without any need to substantiate the actual costs. For the employee this means a considerably higher net salary; for the employer, a stronger hand in the competition for international talent.
The ruling has been pared back repeatedly in recent years and, from 2027, moves to a lower percentage and a new name: the 27% ruling. Anyone who wishes to use it, or whose ruling is coming to an end, would do well to know the current conditions and the transitional rules precisely. This article sets out what the ruling involves, the conditions you must meet, what is changing in the coming years, and what happens when the term ends or an application is refused.
Which conditions must you meet?
Access to the ruling is not automatic. At its core lies the specific expertise test: the employee must possess expertise that is scarce on the Dutch labour market. In practice that scarcity is given concrete form through a salary norm. For 2026 the minimum salary is € 48,013 excluding the targeted allowance, with a reduced norm of € 36,497 for employees under 30 holding a master's degree. From 2027 these norms are raised, lifting the threshold to qualify.
Alongside the expertise test, several hard requirements apply. There is a distance requirement: in the 24 months preceding the employment in the Netherlands, the employee must have lived more than 150 kilometres from the Dutch border for at least 16 of those months, so that the facility goes to those who genuinely come from afar. The employee must be in genuine employment with a Dutch employer, and employer and employee must jointly file an application, on which the Tax Authorities decide by formal decision. The ruling applies for a maximum term of five years, and each year a choice must be made between applying the flat-rate facility or reimbursing the actual extraterritorial costs. A small deviation, such as signing the contract only after arriving in the Netherlands, can already affect the entitlement; the ruling therefore calls for care at the application stage.
What is changing in the coming years?
The ruling is in motion on several fronts at once, and the changes do not all take effect at the same time. The most conspicuous is the reduction of the percentage. Up to and including 2026, a maximum of 30% of salary may be reimbursed tax-free; from 2027 this falls to a maximum of 27%. At the same time the salary norms are raised from 2027, so that fewer employees will qualify.
In addition, a cap has applied since 2024. The basis for the ruling is capped at the remuneration maximum under the Standards for Remuneration Act, the WNT norm. For 2026 that norm is € 262,000, so that a maximum of 30% of it, € 78,600, can be reimbursed tax-free; from 2027 the same cap applies at 27%. The ruling has been further pared back from 2026 in that, for incoming employees, certain costs may no longer be reimbursed under the targeted exemption, such as the extra costs of living including gas, water and electricity, and extra call charges to the country of origin for private purposes. For employees posted abroad, that option does remain.
The most far-reaching change for those who hold wealth, however, is another. As of 1 January 2025, the option for employees with the 30% ruling to elect partial non-resident taxpayer status has been abolished. It was precisely that election which kept certain assets outside the Dutch levy in boxes 2 and 3. For existing cases transitional law applies up to and including 2026, after which the advantage lapses.
Who is protected by the transitional rules?
With so many changes at once, the question of which regime applies to you is often more important than the change itself. The transitional law ties in to a reference date. Employees who fell under the 30% ruling no later than 31 December 2023 retain, for the remaining term of their decision, the right to the old percentage of 30% and to the old salary norms. They are therefore not affected by the reduction to 27% or by the raised norms, for as long as their decision runs.
For the abolition of partial non-resident taxpayer status a separate transitional period applies, running up to and including 2026. The reference date and the remaining term of your decision together determine which rules apply to you, and that is exactly where the difficulty lies. Anyone entering the scheme or changing employer may unwittingly fall under the new, more austere regime. It is therefore essential to check the start date of your employment, the date of the decision and the remaining term precisely before relying on the old conditions.
What happens when your ruling ends or is refused?
An expiring ruling is not an administrative footnote but a tax turning point. While the ruling ran, and while partial non-resident taxpayer status still existed, part of your wealth remained outside box 3. With the end of the term, and with that election having lapsed as of 2025, you fall back into ordinary taxation and must declare your worldwide wealth in box 3. That can mean a considerable shift in your tax burden, which you would rather see coming than have it take you by surprise. The end of the ruling is therefore the moment to review your wealth position afresh and, where possible, to restructure in good time.
If your application is refused, that is not necessarily the end. A refusal often rests on the way the application was presented or on a contestable reading of a condition, such as the distance requirement or the expertise test. A second assessment, with sharper substantiation and a timely, well-structured presentation to the Tax Authorities, regularly leads to approval after all. A thorough approach beforehand, or a well-founded objection afterwards, makes the difference here.
The international dimension: more than just salary
The 30% ruling is often presented as a purely Dutch payroll matter, but for those who live internationally it touches a broader whole. Now that partial non-resident taxpayer status has been abolished, the treatment of your foreign wealth in box 3 weighs more heavily, and the interaction with any applicable tax treaty, the consequences for pension and the tax side of a later emigration all hang together with it. An international who comes to the Netherlands, and may later leave again, would do well to view the ruling not in isolation but as part of their full cross-border tax position.
That is precisely where our practice is at home. We assess the 30% ruling not as a standalone form, but in conjunction with your wealth, your treaty position and your plans for the longer term, with particular attention to those who hold income or interests in more than one country. Whether it concerns a timely, well-substantiated application, a second opinion after a refusal, or the transition when your ruling ends, the value lies in the coherence.
This plays out in emigration and cross-border business. Read more about our advice on emigration and international tax, or get in touch directly.
The information on this page is general and informative in nature and does not constitute tax or legal advice. For application to your specific situation, we are glad to advise you personally.