Dutch 30%-ruling shortened from 8 to 5 years per 2019

1 May 2018 - The Dutch 30%-ruling validity period will be shortened from 8 to 5 years. This amendment will be part of the 2019 tax plans, as announced by the Dutch government. Details are to be confirmed and laid down in legislation.


At this moment it appears that this change will affect both new and existing cases. There is no mention of transitional legislation for existing cases, yet. This could mean that employees who are eligible for the 30%-ruling, and have enjoyed the ruling for 5 years or more on 1 January 2019, lose the benefit from that date.

New 30%-ruling requests are normally honoured for a maximum period of 8 years. This will now be cut to 5 years.


The 30%-ruling has been contested in situations where expats have a greater financial benefit compared to the extra costs they incur for working in the Netherlands. In other words, the 30%-ruling does not respect its purpose. This consideration has led to the introduction of the 150 kilometre conditions, excluding expats who were residents in the 150 kilometre zone from the Dutch border from the ruling. Although this condition has been heavily criticised for discriminatory effect, the EU Court decided it was legally allowed. This nevertheless resulted in an evaluation of the 30%-ruling, eventually calling for further measures to reduce overcompensation.

Whereas ‘new’ expats incur extra costs for working abroad, ‘old’ expats are expected to have settled and should incur less extra costs. With the shortening of the 30%-ruling’s validity, the settling-in process is deemed to take about 5 years. The expat employee should not have extraterritorial costs anymore after 5 years, hence there should be no reason to allow him to benefit from the 30%-ruling after those 5 years.

What to do?

It’s not unimaginable that expats will shorten their Dutch horizon, and employers adjust their policies accordingly.

For employers:

  • Register the remaining 30%-ruling validity period of all your expatriate staff.
  • Investigate what has been agreed with employees with regard to the application of the 30%-ruling.
  • Analyse any tax free alternatives under Dutch law.

For employees:

  • Calculate the financial impact of potentially losing the 30%-ruling per 1 January 2019.
  • Understand the impact for Dutch asset taxation (box 3).
  • Consider alternatives, even working outside the Netherlands.

Want to know more?

Would you like to know more about the 30% allowance ruling? Please contact Alexander Rasink, tax adviser at Global Mobility Services, by e-mail or by phone: +31 88 277 16 15. He will be happy to help.


What may be of interest to you:

  • Mazars 30%-Ruling Risk Analysis: how to optimize the 30%-ruling, prevent 30%-ruling loss, limit tax exposure
  • Mazars Global Mobility Audit: take control of your cross border tax and compliance, risk analysis, optimization solutions