The path to qualification 

To qualify for the 30% tax ruling, an individual must meet specific criteria set forth by the Dutch tax authorities. These criteria include being recruited from abroad or being transferred to the Netherlands by an employer.

Additionally, the individual must have lived at least 150 kilometres away from the Dutch border for at least 17 of the 24 months prior to the start of employment in the Netherlands.

Salary Thresholds

The salary threshold to qualify for the 30% ruling has increased for 2024. For individuals to qualify, the taxable salary must meet the following requirements:

●      For employees under 30 years old with a Master's degree (or equivalent): The taxable salary must be at least €38,338 (after taking out the tax-free part).

●      For other employees: The taxable salary must be at least €50,436 (after taking out the tax-free part).

Maximum Duration of the Ruling

The 30% tax ruling applies for a maximum period of five years. However, there is no extension possible. Importantly, any time spent in the Netherlands within the last 25 years prior to the start date of employment, whether for business or personal purposes, will be deducted from the five-year period.

Changes to the 30% Ruling: The 27% Flat Rate

Starting January 1, 2027, the 30% ruling will be replaced with a fixed 27% flat rate. This new tax system eliminates the previous scaling and provides a consistent tax-free allowance for employees who qualify.

●      Employees who received the 30% ruling before January 1, 2024, will retain the 30% tax-free allowance and the existing salary thresholds until the end of their ruling period.

●      Employees who received the 30% ruling in 2024 will continue with the 30% tax-free allowance until December 31, 2026. Starting January 1, 2027, the 27% flat rate will apply.

Transitional Rules

Employees who received the 30% ruling before January 1, 2024, are subject to transitional rules. The 30% tax-free allowance and current salary thresholds will continue to apply to them. However, starting January 1, 2027, the new 27% flat rate and salary thresholds will apply to all qualifying individuals.

Changes to Partial Foreign Taxpayer Status

Starting January 1, 2025, the partial foreign taxpayer status option will be abolished. Employees who have been receiving the 30% ruling can still benefit from partial foreign taxpayer status under the transitional rules until 2026.

Required Documentation for Application

Before applying for the 30% Tax Ruling, individuals must gather several key documents, such as:

●      Employment contracts

●      Resumes

●      Proof of place of residency during the last 24 months prior to starting employment in the Netherlands

Both the employer and the employee need to file the application with the Dutch tax authorities.

For Entrepreneurs: Qualifying for the 30% Ruling

Entrepreneurs who want to qualify for the 30% ruling in the Netherlands have two options for their business structure:

●      Sole Proprietorship: Operates with simplicity but is subject to higher annual taxes on profits. Entrepreneurs may still qualify for tax benefits like the small companies discount and self-employed tax deduction.

●      Limited Liability Company (B.V.): Provides greater tax advantages, including eligibility for the 30% ruling, but entails additional obligations such as payroll and quarterly VAT filings. Shareholders must also meet a minimum salary requirement to fully benefit from the ruling.

Professional guidance matters 

Navigating the application process and meeting eligibility criteria can be complex, demanding thorough preparation and expert guidance. Consulting with a tax advisor or immigration specialist can provide clarity on any inquiries and ensure all requirements are met prior to submitting the application. In the case of the latter, RSH | Relocation and Immigration Services offers tailored Taxation support.