2023-11-02-KPMG_Global-Netherlands_–_Bill_Under_Review_Would_Scale_Back_30_Ruling_Further_4页_323kb

Summary of Netherlands 30% Ruling Changes

The Netherlands is proposing significant reductions to the 30% ruling for highly-skilled foreign employees, effective from 1 January 2024, if parliamentary approval is granted. This ruling, which compensates for extraterritorial expenses, will be scaled back over five years to a 10% exemption rate.

Key details:

• Starting 1 January 2024, incomes exceeding €233,000 (WNT-norm for 2024) will not qualify for the exempt amount.
• The exempt salary portion decreases over time: 30% for the first 20 months, 20% for the next 20 months, and 10% for the final 20 months.
• Employees who were using the 30% ruling by 31 December 2023 may not be affected by the gradual reduction but have grandfathering provisions until 1 January 2026 for the pay cap and related status.

Additional impacts include:

• The abolition of partial foreign taxpayer status from 1 January 2025, potentially leading to double taxation for some employees, like US nationals.
• Employers can choose between the 30% ruling or reimbursement of actual expenses from 1 January 2023.
• These changes may increase tax burdens for employees and assignment costs for employers, with recommendations to assess both options and comply with legal obligations, including informing affected employees.