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Maybe you’re a highly skilled migrant working in the Netherlands, or maybe you’re someone that’s thinking about moving here to start a new challenge. If so, you might be eligible for the 30% tax ruling that’s about to undergo some changes.

Earlier this year, the Dutch House of Representatives voted in favor of two new amendments that will drastically change the 30% ruling. Now, if these changes make you scratch your head, or if you just like to know more, then this information is for you. So let’s unravel this, shall we?

Recap: what is the 30% tax ruling?

If you’re reading this thinking ‘what is the 30% tax ruling?’, this quick recap is for you. The 30% reimbursement ruling (better known as the 30% tax ruling or the 30% facility) is a tax advantage for highly skilled migrants moving to the Netherlands for a specific employment role. If you meet the necessary criteria, you will be eligible for a tax-free allowance equivalent to 30% of your gross salary for up to 60 months.

Feeling up to speed? Good. Now let’s see about these changes.

1. Your taxable income and net salary could change

Instead of the 30% tax ruling, you’ll likely be dealing with a new 30%/20%/10% rule. This means you will receive a 30% tax-free salary for the initial 20 months. Then, for the next 20 months, 20% of your salary will be untaxed. Lastly, during the final 20 months, you will receive a tax-free salary of 10%.

Consequently, this can result in a significant reduction of your net salary. Why’s that you ask? Well, companies that use the tax equalization method will experience a serious increase in costs, which could negatively impact your compensation.

 

all the changes to the 30% tax ruling

 

2. You could be taxed based on your worldwide income

Currently, employees residing in the Netherlands that use the 30% ruling can apply for partial non-resident tax status. This gives you the opportunity to opt out of taxation of foreign assets. Your overseas savings, stocks, real estate and even crypto are not considered in Dutch income tax returns.

Starting 2025, however, this non-resident tax status will disappear. The second amendment will entail the abolition of the partial non-resident taxpayer status. Worldwide income, including investment returns and holdings, could now be subject to taxation, potentially causing double taxation.

Apply to the 30% tax ruling before 1st of January

With these new amendments, the 30% tax ruling will be made more limited. But, there is a bright side to all of this. If you apply the ruling before 1 January 2024, the original 30% ruling will remain applicable. So, if possible, don’t hesitate and start applying today!

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