Key Aspects of the 27% Ruling (Effective Jan 1, 2027)
- Reduced Rate: The maximum tax-free reimbursement drops from 30% to 27% of gross wages.
- Salary Thresholds Increase: The required annual taxable salary will rise to €50,436 (2024 levels) and €38,388 for those under 30 with a master’s degree.
- Duration: The ruling is applied for a maximum of 5 years (60 months).
- No Further Scaling: Unlike previous proposals, the 27% is intended as a flat rate, not a 30-20-10% tiered reduction.
Important Transitional and Tax Rules
- Existing Holders: Employees benefiting from the ruling before January 1, 2024, are exempt from the 27% change and maintain their 30% advantage.
- Partial Non-Resident Status: As of January 1, 2025, foreign employees cannot choose to be treated as non-residents for Box 2 and 3 (tax on investments/wealth).
- Actual Costs Option: If the 27% cap is too low, employers can reimburse actual extraterritorial costs, provided they are documented.
- Eligibility: Must be recruited from abroad, possess specialized skills, and meet the salary threshold.
PwC Nederland +4
Background and Implementation
The move to 27% is a parliamentary adjustment to mitigate the total removal of the tax advantage, reverting from earlier, harsher proposals that would have phased the ruling down to 10%. The 27% rate will be implemented to compensate for the high cost of living (extraterritorial costs) for incoming international staff.
The move to 27% is a parliamentary adjustment to mitigate the total removal of the tax advantage, reverting from earlier, harsher proposals that would have phased the ruling down to 10%. The 27% rate will be implemented to compensate for the high cost of living (extraterritorial costs) for incoming international staff.
2025 & 2026 Rules
- The 30% rate still applies during these years.
- The partial non-residency status is gone as of January 1, 2025.
