Reductions to Dutch 30% tax benefit for foreign workers under review by Senate
The Dutch tax benefit known as the 30% facility or 30% ruling (30%-regeling) is to be scaled back. The Dutch parliament recently approved a new proposal to reduce the facility progressively from 30% to 10% over the five-year term. The changes will apply to new applicants from 1 January 2024.
Under the current rule, for a period of five years, some foreign workers who come to the Netherlands are eligible to receive the first 30% of their salary tax free. To qualify, they have to meet specific conditions, including a minimum salary threshold, recruitment from abroad, and residence at a certain distance from the Dutch border.
Proposed reduction of 30% facility
Under the changes outlined by the proposed amendment, the facility will still be available for five years, but will decrease progressively.
- In the first 20 months, eligible individuals will continue to receive 30% of their gross salary tax free.
- In the following 20 months, the tax-free allowance will be reduced to 20%.
- Finally, in the subsequent 20 months, the allowance will decrease to 10%.
The changes only apply to individuals who begin using the 30% facility on or after 1 January 2024. Those already benefiting from the facility will remain unaffected, and will continue to receive 30 percent of their gross salary tax free for the full five years.
Additionally, if approved, the 30% facility will only apply to salaries up to the maximum set by the Standards for Remuneration Act, which limits top salaries in the public and semi-public sectors.
Awaiting Senate approval
The proposed changes are currently being reviewed by the Dutch Senate (Eerste Kamer), and a vote is scheduled for 19 December.