As of 1 January 2024, several changes came into force in the Dutch fiscal and tax plans for individual income taxes, corporate income taxes, and other areas.
The Czech-Slovak Dutch Chamber of Commerce in cooperation with its member Taxperience hosted an online tax seminar offering its members insight into these tax changes which are important to know about.
The recent taxation changes important to be aware of
The main objective of the webinar was to navigate attendees through the maze of fiscal adjustments shaping the year ahead. The agenda covered the main areas of change:
- Dutch personal income tax rates: A thorough update on the current rates, ensuring attendees were abreast of the latest adjustments.
- Proposal for new box 3 taxation regime: Delving into the proposed changes, shedding light on their implications for taxpayers. The box 3 is currently a hot topic as a ruling of the Dutch Supreme Tax Court is expected in the next months. As of 2027, a new box 3 regime should be introduced by the Dutch Tax Authorities.
- 30% ruling and partial non-resident taxpayer regime: An in-depth analysis, including insights from the Taxperience’s Lower Court case.
- International corporate tax developments: A concise overview encompassing substance requirements, the status of ATAD III, Dutch Foreign Entity Classification Rules, and EU Tax Proposals.
Situation on the 30% tax ruling
One topic emerged as a beacon of interest: the 30% ruling. Often seen as a hallmark of Dutch expatriate employment, it underwent impactful modifications in recent years.
The 30% ruling allows an employer to pay up to 30% of the salary of an employee tax-free. It was introduced under the context of the Dutch Wage Tax Act 1964. The rationale of this tax facility is to reimburse certain expats for the occurred extraterritorial expenses, such as moving costs, travel costs, accommodation costs, etc. when they moved to the Netherlands. It made it more attractive for the highly educated foreign workforce to relocate to the Netherlands and stay here for a longer term. The ruling has however changed throughout the years and become less attractive. Since 1 January 2019, qualifying workers may use this 30% facility for only 5 years. And it did not stop there.
Since the year 2024, all users of the ruling are required to meet certain salary requirements. Eligible employees of 30 years and older have to earn at least € 46,107 per year. For individuals younger than 30 years it is € 35,048. Regardless of age, all employees need to have a master’s degree. The maximum untaxed compensation is €69.900 for a salary of €233,000 or higher that an employee gets.
The latest change came into force as of 1 January 2024 representing another reduction of the benefits. From 1 January 2024, the benefit of the 30% ruling has been reduced as follows:
- The first 20 months: 30%
- The second 20 months: 20%
- The third 20 months: 10%
On top of the changes in 2024, the partial non-resident taxpayer regime for 30% ruling-holders will be abolished as of 2025, with transitional rules for existing cases until the end of 2026.
These recently introduced changes created a wave of negative reactions among international companies established in the Netherlands with strong concerns about their competitiveness compared to other countries when it comes to attracting highly educated foreign employees to their offices located in the Netherlands.
Due to these recent changes, it become a hot topic in the taxation arena even reaching the Dutch parliament for discussions. It cannot be excluded that further changes will be introduced in coming years or some of the previously made changes may be adjusted.
Interested in learning more about the Dutch tax landscape, changes to come, and the impact on you and your company? Contact us to find out more: info@cdcc.nl