The Netherlands Government has announced plans to change the ‘30% Ruling’ measure which provides a tax incentive for employers who hire foreign workers.  The program was designed to attract qualified talent and help foreign employees adapt to living in the country for up to five years.

The ‘30% Ruling’ provides employers a 30% exemption on salary taxes, if employees are:

• Hired by a Dutch headquartered or foreign Subsidiary (must be paying taxes in the Netherlands)
• Highly qualified/specialized: workers must have specific professional experience

• Meet compensation minimums: foreign employees must earn more than €46.107 ($48.664), and the exemption applies only to the amount in excess of the minimum

Both companies and employees receive reduced Social Security and tax benefits, but that amount will be reduced gradually through 2027. Specifically:

• For contracts prior to January 2025: minimum compensation requirement will be maintained at €46.107

• From 2027: minimum compensation will be €50.436

• As an exception, for employees under 30 who have a master’s degree,the salary threshold will be €38.338 starting in 2027.   The prior limit was €35.048
• The 30% ruling, which had been reduced to a 30%-20%-10% ruling, each period for 20 months (about 1 and a half years), will revert to a ruling for the whole period of 60 months (5 years), but at 27%.

Tax, accounting and payroll management in the Netherlands or other countries can be difficult. Auxadi offers these services to help with your international expansion.

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.