Do your foreign employees benefit from the 30% ruling? Be aware that starting from January 1, 2024, the Dutch Tax Authorities will limit the application of this scheme. What changes for you and your employees?
What benefits does the 30% ruling offer?
The 30% ruling is an attractive scheme for the Dutch labor market, allowing foreign employees to enjoy a tax-free reimbursement of up to 30 percent to cover extraterritorial costs ("ET costs").
How will the 30% ruling change in 2024?
As an employer under the new rules, you can reimburse a maximum of 30 percent of your employee's income tax-free, up to the "WNT standard" ("Balkenende standard"). Any amount exceeding this standard is subject to the regular tax rate. Based on the 2024 WNT standard (233,000 euros), this tax-free reimbursement amounts to 69,900 euros per year. If your employee does not work the entire year in the Netherlands, a proportionate calculation applies.
Prefer to have actual ET costs reimbursed?
If the actual ET costs exceed 30 percent of the WNT standard, your employee can choose to have the actual ET costs reimbursed instead of applying the 30% ruling.
The following criteria apply:
- Your employee can make this choice once a year. This choice applies for an entire calendar year, with the exception of the first four months of the first year of employment due to the processing time for the 30% ruling application.
- Your employee must provide substantiation of the actual ET costs.
Transition rule: 30%-ruling applied before January 1, 2023
Has your employee applied the 30% ruling before the end of the 2022 tax year? Then a transition rule applies. As a result, the new rules will apply from January 1, 2026.
Transition rule: 30%-ruling applied after January 1, 2023
If your employee only becomes eligible for the 30% ruling after January 1, 2023, they do not fall under the transition rule. Therefore, the new rules apply per January 1, 2024.
Seeking certainty regarding the application of the 30%-ruling?
Would you like to know more about the 30% ruling application for your employees? Or are you planning to hire foreign employees in the coming years?
Contact one of our specialists
