Share with your friends

Netherlands – Important Change to 30% Ruling Coming in 2019

Netherlands – Important Change to 30% Ruling Coming

This report covers the measure shortening the period for which the 30% ruling is granted from eight to five years as of January 1, 2019.




Partner and Head of the People Services practice

KPMG Meijburg & Co.


Related content


On April 20, 2018, the Dutch government announced that the 2019 Tax Plan will include a measure shortening the period for which the 30% ruling is granted from eight to five years as of January 1, 2019.1


The shortening of the period for claiming the 30% ruling can create compliance and cost issues for expatriate employees and their employers, once the five-year period expires.  Expatriate employees who are affected by this decision should, with their employers and their tax service providers, assess their situations in light of the shortened period of applicability.  Planning alternatives for expatriate employees who may remain taxable in the Netherlands beyond the five-year limit of the 30% ruling should be considered. 


The 30% ruling is a form of tax relief for employees coming to the Netherlands who are recruited from abroad and who possess specific expertise that is not present or is scarce in the Dutch labor market.2  Under this tax relief, roughly 30% of such an employee’s salary will not be taxed.

Applicability to Employees Currently Taxed under 30% Ruling

Of vital importance is the fact that this change also applies to employees currently using the 30% ruling, for whom the duration will also be shortened to five years as of January 1, 2019. 


Employers should re-determine the remaining term of the 30% ruling as of January 1, 2019, for all employees currently using it.

Other Noteworthy Aspects of Change to 30% Ruling

Under the 30% ruling, it is possible to opt for partial foreign taxpayer status.  This means that for the purposes of taxation in Box 2 and Box 3, the employee is regarded as a foreign taxpayer and is only subject to tax in Box 2 on income from a substantial interest in a Dutch company and in Box 3 on income from property situated in the Netherlands.3

Due to the shortened duration of the 30% ruling, the period during which the option for partial foreign taxpayer status can be taken will also be shortened from eight to five years.


1  See (in Dutch) “Fiscale regeling voor buitenlandse werknemers verkort van acht naar vijf jaar,” (20-04-2018).  

2  For prior coverage of the 30% ruling, see GMS Flash Alert 2016-050 (8 April 2016).

3  For more on taxation in the Netherlands and further information on Box 2 and Box 3, please see Taxation of International Executives: The Netherlands, a publication of KPMG International. 

The information contained in this newsletter was submitted by the KPMG International member firm in The Netherlands.

© 2020 Meijburg & Co Caribbean, Tax Lawyers, is an association of limited liability companies and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us


Want to do business with KPMG?


loading image Request for proposal