)
Changes in the 30% Ruling
The Dutch House of Representatives has passed an amendment (26 October 2023) to further reduce the 30% tax rule which is a tax advantage for highly skilled migrants working in the Netherlands as per 1 January 2024.
A second amendment has also passed to abolish the partial foreign tax obligation as of 1 January 2025 for those who fall under the 30% tax rule.
What does this mean for the 30% tax ruling?
The current scheme allows a highly skilled migrant to apply for a 30% tax exemption of their salary under certain preconditions.
The proposal which comes into effect as of 1 January 2024, will significantly reduce the tax advantage for those who start as of 1 January 2024 or later, affecting those who earn above the ‘WNT-norm’ (€233.000 for 2024) . You’ll receive a maximum of €66.900 tax-free.
However, if you applied before December 31, 2022, you can enjoy the full benefit until January 1, 2026, instead of 2024.
Keep in mind, that these changes may impact individuals with income taxed in multiple countries, altering tax amounts and double taxation prevention.
The maximum duration of 60 months remains the same.
From 1 January 2024, a maximum of 30% savings will only apply for the first 20 months.
After 20 months, a maximum of 20% savings will only apply for the second 20 months.
After 40 months, a maximum of 10% savings will only apply for the third and last 20 months.
When the duration of the compensation only applies to a shorter period than 60 months, the same period and percentages apply.
This measurement and the savings that will follow will be used to reduce the student loan interest.
There will be a transition period for those who are currently successfully applied for the 30% tax ruling in the last salary pay period of 2023.
Partial Foreign Taxpayer Status
Under the current scheme, a remission of tax payment can be applied for those who fall under the 30% ruling.
The second amendment will abolish the partial remission of tax as of 1 January 2025.
Transitional rules will apply for those who already applied for the 30% rule on 31 December 2023, and can benefit from the status through to 2026.
Currently, there are still many unanswered questions so feel free to contact us for more information or guidance.
)
)