The 30% ruling: new changes for highly skilled migrants in the Netherlands

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The 30% ruling: new changes for highly skilled migrants in the Netherlands

The Senate of the Netherlands is planning important changes to the tax legislation concerning migrants. This decision will be introduced to stimulate the attractiveness of the Dutch labor market for highly qualified specialists. Learn more about the features and provisions of the new decree on 30% tax benefits

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In 2024, the Netherlands plans to amend the rules for highly skilled migrants by 30%.

If you are a skilled migrant who benefits from the 30% rule or has entered into an employment contract in the Netherlands before December 31, 2023, your tax benefit will not be affected until January 1, 2026.

However, if you are a skilled migrant arriving in the Netherlands from 2024 onwards, you will not be able to benefit from this rule due to the amendments. Here's what you need to know about the changes proposed in the 2024 Tax Plan.

A 30% reduction in the tax rate for migrants in the Netherlands

The deputies who received the majority of votes intend to pass an amendment that reduces the 30 percent rule. According to the amendment to the 2024 Tax Plan, the new rule works as follows:

For 20 months, eligible employees receive a tax credit of 30% of their salary. The tax rebate is then reduced to 20% for the next 20 months, and then reduced to 10% for the last 12 months.

Existing employees who have a decision, as well as foreign employees who will start working before December 31, 2023, are subject to these changes. In addition, the application of the 30 percent ruling will be limited to the Balkenende standard, which in 2023 was €223,000, from January 1, 2024.

The Dutch Senate has not yet voted on this amendment. However, expats and migrants should start planning their budgets now in case of possible innovations. 

Current 30% rate for migrants in the Netherlands

In most cases, highly skilled migrants who meet the income threshold can apply for a 30% rate.

This makes it possible to exempt 30% of an employee's salary from taxation. The tax relief is valid for five years.

To be eligible for this benefit, the following conditions must be met:

1. a highly skilled migrant working in another country;

2. a migrant with specialized knowledge (qualification requirement);

3. the employee must receive at least EUR 41,954 per year until 2023;

4. the employee works for an employer who is registered with the Dutch tax office;

5. the employer acts as a withholding agent for payroll tax in the Netherlands. 

This regulation facilitates the attraction of highly qualified foreign workers to the Dutch labor market. In addition, it provides incentives for employees and compensates them for their housing and travel expenses.

30% tax rate for migrants in the past

The benefits and scope of the 30% rate are constantly changing. For example, in 2019, the Dutch government voted to reduce the period during which qualified migrants can receive the tax benefit from eight to five years.

In recent years, the minimum wage eligible for this program has also been changed. In particular, the minimum taxable income in 2019 was €37,743. On the other hand, the minimum wage was changed to EUR 38,347 by 2020.

The 2024 tax plan, which envisages a 30 percent change, is to be adopted. We suspect that minor adjustments and changes will be made to the amendments, so we are following the voting.

Daria Rogova, Head of Insurance at Visit World

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