In 2025, employers in the Netherlands face several transformative changes in tax and immigration. In this publication we provide a brief overview of the main changes that employers should be aware of, so they can take timely action as they set out new strategic priorities for this year.
Dutch expat regime (30% ruling)
Tax exempt amount: 30% in 2025 and 2026, 27% as of 2027
The so-called 30/20/10 ruling that applied as of 1 January 2024 is partially reversed as of 1 January 2025. For 2025 and 2026, there will be a fixed maximum of 30% for all employees eligible for the 30% ruling, instead of 30% for the first 20 months, 20% for the second 20 months and 10% for the last 20 months. As of 1 January 2027, this percentage will be reduced to 27%. Transitional rules in principle apply for individuals who already received a tax free allowance under the 30% ruling prior to 2024. Based on historical changes, we expect that in practice it will be considered relevant if the 30% ruling was applied in the December 2023 payroll.
Salary norm: additional increase as of 2027 (on top of annual indexation)
The second announced change is 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 and will take place as of 1 January 2027. Transitional rules are expected to apply for individuals who already received a tax free allowance under the 30% ruling in 2024.
Overview key dates
The aforementioned changes further increase the complexity of the Dutch expat ruling and the variety of transitional rules. For completeness’ sake, we have therefore included a high level overview of the key dates below:
Income tax rates
Change in Box 1 tax rate (a.o. employment income)
The legislator has introduced a limited reduction of the Box 1 tax rate for income up to EUR 38,441 (first tax bracket) as of 1 January 2025. Furthermore, there is a limited increase of the threshold for the top tax rate of 49.5% as of this date as well.
Change in Box 2 tax rate (substantial interests)
As of 1 January 2024, Box 2 consists of two tax brackets. Initially, this was announced as a tax rate of 24.5% on taxable income from substantial interest up to EUR 67,000 and a tax rate of 31% on the excess. During the parliamentary discussion of the Budget Day for 2024, an amendment was passed to raise the top tax rate to 33% for 2024. As of 1 January 2025, this is reversed and the top tax rate for Box 2 therefore amounts to 31% (for income exceeding EUR 67,804). The 24.5% rate in the first bracket remains unchanged.
No change in Box 3 tax rate (personal investment income)
In the coalition agreement presented in May last year, a reduction of the Box 3 tax rate was announced. However, this reduction has not taken place. This means that the current Box 3 tax rate of 36% remains applicable in 2025.
Enforcement of assessment of work relationships per 1 January 2025 (Wet DBA)
The Dutch government wants to work towards a (more) level playing field for employees and self-employed individuals and is therefore looking into fitting (tax) measures in order to (re-)qualify the work relations of incorrectly qualified individuals, more specifically in the case of falsely self-employed persons. Due to pending (labour law) legislation and previously published model contracts, the Dutch tax authorities until now only enforced (by ways of imposing additional levies and penalties) the current rules regarding the qualification of work relations in case of malicious intent.
As of 1 January 2025, the Dutch tax authorities started with enforcement of the legislation currently in place. This means that the Dutch tax authorities are more likely to impose additional wage tax and social security assessments or correction obligations as of 1 January 2025 in case of false self-employment. The Dutch tax authorities did announce that in principle no fines will be imposed in 2025 to parties that are actively working on the correct/arguable qualification of work relations. Enforcement will also not take place retroactively (for years prior to 2025) when there is no malicious intent of parties. Enforcement can take place retroactively in case of non-compliance with imposed instructions by the Dutch tax authorities after an audit.
New Governing Programme and Migration Policy Reforms
In September 2024, the new Dutch Prime Minister Dick Schoof presented the coalition government’s legislative programme with migration policy at its centre. While legislative and policy proposals are focused on asylum, key proposals also include stricter criteria for skilled and labour migration. This is likely to lead to tighter eligibility requirements for recognised sponsors and possibly also for certain employment-based immigration applications. In addition, the plan includes new sector-specific measures to boost productivity and innovation, including initiatives to stimulate labour participation and targeted investments in key industries. The new coalition also seeks to strengthen the Dutch Labour Authority and increasing inter-agency cooperation, with tougher penalties for non- compliance, especially in sectors with low-skill positions.
Increased enforcement of recognised sponsors
In response to this policy shift, the Immigration and Naturalisation Service (IND) has further intensified monitoring of recognised sponsors through audits and compliance checks. In addition, the IND has introduced several new measures that increase compliance obligations. This includes measures such as:
Further to the above measures by the IND, it is expected that the Dutch Labour Inspectorate (Arbeidsinspectie) will increase enforcement.
Re-introduction of Temporary Border Controls
From 9 December 2024 the Dutch government has reintroduced temporary border controls at some internal Schengen border crossings. This measure follows the practices in neighbouring countries and is intended to curb irregular migration and maintain national security. Cross-border workers and other (business) travellers should expect potential delays and increased checks, particularly when travelling frequently by train or road.
Employers are advised to ensure that their mobile workforce carries all necessary travel documents and complies with any additional requirements.
Salary Thresholds for 2025
The Dutch government published the immigration salary thresholds that apply for Highly Skilled Migrant and labour migrant work permit and residence permit applications. These thresholds are indexed on a yearly basis from 1 January. The gross monthly amounts for 2025, excluding 8% holiday pay, are as follows:
These age-based thresholds also serve as benchmarks for applications under the ICT Directive. In addition, the gross monthly threshold for an EU Blue Card is set at EUR 5,688 and at EUR 4,551 for certain recent graduates.
Recast EU Blue Card Directive Takes Effect
Mid-2024, the Netherlands has implemented the changes of the recast EU Blue Card Directive into national law. It is expected that these changes will lead to an uptick in applications for this permit type. This is because the new rules increase flexibility for employees and introduce some measures that make the category more attractive than before. Some of the most important changes include:
The Directive also introduced a search period in case a Blue Card holder becomes unemployed. The unemployed holders have up to 3 months to find a new Dutch employer and 6 months if the holder has been in possession of an EU Blue Card for at least 2 years. Despite these improvements, it is expected that the national Highly Skilled Migrant application category will remain more attractive due to its lower salary threshold for persons aged under 30 and for recent graduates, in addition to fewer qualification requirements.
Extension and amendment of temporary protection for Ukrainian nationals
A ruling by the Dutch Council of State confirmed that effective from 4 March 2024, the EU Temporary Protection Directive (TPD) was no longer applicable to non-Ukrainian nationals in the Netherlands. Non-Ukrainian TPD holders who wish to continue residing in the Netherlands needed to secure an alternative residence status. In contrast, Ukrainian nationals have retained their rights under the TPD, including work rights. The Council of the European Union extended the validity of the TPD by one year, up to and including 4 March 2026. Employers should note that Ukrainian TPD holders are required to possess an IND-issued document or passport sticker as proof of their status, and any hiring of such employees must be reported to the Dutch labour authority UWV.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
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Partner
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Director
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Senior Manager
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Manager
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Senior Associate
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