The Netherlands: '30% Rule' Preferential Tax Rule Changes Forthcoming

At a Glance

• The government has rejected the so-called '30/20/10% plan' (the rule that allows eligible foreign nationals to not pay tax on up to 30% of their income for five years, with sequential reductions in this percentage over time), and has instead released its policy plans for the updated ruling scheme.
• Per the new rule, from January 1, 2027, a new tax-free percentage of 27% instead of 30% will apply to each foreign employee's salary. This reduced percentage does not apply to employees who held 30% ruling status prior to January 1, 2024.
• Though the new rule is less severe than the original '30/20/10' proposal, the new rule may impact employers and employees, requiring careful consideration and proactive workforce planning.