Global Equity

Netherlands | Changes to the Dutch expat tax regime as of 1 January 2026 and 1 January 2027

Summary

The expatriate tax regime in the Netherlands (previously known as the 30% ruling) continues to evolve, with significant reforms taking effect in 2026 and 2027 that reduce the overall tax benefit available to qualifying employees. While the expat tax regime remains in place during 2026, this year represents the final phase of certain transitional provisions, including the expiration of the favourable tax treatment of personal wealth. From 1 January 2027, the tax-free allowance will be structurally reduced to 27%, reflecting the government’s policy shift towards limiting fiscal incentives to expatriates. These changes mark a gradual tightening of the regime and will have implications for both employers and employees.

The detail

What is the Dutch expat tax regime?

The Dutch expat tax regime is a tax advantage applying to expatriates moving to the Netherlands for work, aiming to attract scarce and skilled employees.

A foreign employee working in the Netherlands may be granted the Dutch expat tax regime if certain conditions are met. This ruling allows employers to pay employees a tax-free allowance of up to 30% of their employment income (up to a certain cap) for a maximum period of 5 years (reduced if the employee has worked or stayed in the Netherlands in the past).

To qualify, there are multiple conditions, including but not limited to the following for inbound employees:

• The employee would need to be recruited or assigned from abroad to work in the Netherlands;
• Must have highly skilled specific expertise that are scarce or not available in the Dutch labor market (normally tested based on a minimum salary condition);
• Prior to working in the Netherlands, the employee must have lived outside a 150-kilometer radius of the Dutch border for more than 16 of the 24 months prior to the Dutch employment.

What changed as of 2026?

Prior to 2024, there was no limit on the portion of income eligible for the 30% exemption. In 2022, the Dutch government announced plans to gradually introduce a cap on the benefit. This cap is based on the regulated maximum remuneration for the public sector. As a result, a cap of EUR 233,000 formally came into effect on 1 January 2024, with transitional rules allowing individuals who were already benefiting from the 30% ruling at the end of 2022 to continue to enjoy an uncapped exemption up until the end of 2025. For all other cases the cap applied from 2024. The cap increased to EUR 246,000 in 2025 and is set at EUR 262,000 for 2026. From 1 January 2026, the cap now applies to all cases irrespective of when the expat tax regime was first granted, as the transitional rules for expatriates who had been using the regime since 2022 have ended. In practice, this means that the benefit of the Dutch expat tax regime is capped to an annual tax-free allowance of EUR 78,600 (262,000 * 30%). This benefit is prorated if the individual in question is not eligible for the regime for a full calendar year.

Unlike previous years, no (further) changes were introduced with respect to the Dutch expat tax regime as of 2026. Consequently, the only other change that came into effect as of this year is the regular (annual) indexation of the minimum salary norm to be eligible for the Dutch expat tax regime. As of 1 January 2026, the minimum annual salary to be eligible for the expat tax regime should exceed EUR 48,013 (regular norm) and EUR 36,497 (lowered norm, applicable to employees under 30 years of age with a qualifying Master’s), which equaled an indexation of 2.9%.

Further changes as of 2027

While no further changes were introduced as of 2026, there are several (future) amendments to the expat tax regime that have already become part of the legislation.

In short, these changes are as follows:

1.  Tax-free percentage: reduced to 27% as of 2027 (unless transitional rules apply)
   • As of 1 January 2027, the maximum tax-free percentage will be reduced from 30% to 27%.
   • Transitional rules apply if the holder of the Dutch expat tax regime already had the benefit of the ruling in the last wage tax period of 2023.
2. Minimum salary norm: additional increase as of 2027 (unless transitional rules apply)
   • As of 1 January 2027, there will be an additional increase of the minimum salary threshold that an incoming employee should meet in order to be considered eligible for the 30% ruling. This additional increase will be on top of the annual indexation.
   • Transitional rules apply if the holder of the Dutch expat tax regime already had the benefit of the ruling in the last wage tax period of 2024.
3. Partial non-residency taxpayer regime: transitional rules cease to apply as of 2027
   • Under the partial non-residency taxpayer regime, holders of the expat tax regime were (almost completely) exempt from paying taxes in Box 2 (substantial shareholding) and Box 3 (savings and investments).
   • The partial non-residency taxpayer regime ceased to apply as of 2025, unless transitional rules apply. Based on these transitional rules, the change applies as of 1 January 2027 if the 30% ruling was applied in the last wage tax period of 2023.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Niek Schipper
Partner

Daan Hajer
Senior Manager

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