The plan to abolish the ruling has been modified in the Spring Memorandum 2022, which was issued last May. The proposal was made to limit the 30 percent ruling to an income of up to €216,000, the so-called “Balkenende norm.” A transition period of three years will apply to current 30 percent ruling holders. The proposed modification in the Spring Memorandum is only an advance notice. The legislative proposal will be published on Prinsjesdag (Budget’s Day), after which the amendment will come into effect on January 1, 2024, provided that parliament agrees during the general political debate on the budget memorandum in the fall of 2022.

Currently, the ruling applies to workers who are recruited from abroad to work in the Netherlands temporarily. In addition, workers who are 30 years or older need to earn a minimum salary of 56,000 euros a year. The minimum salary for workers younger that 30 with a master’s degree is 43,000 euros. An exception applies to employees who conduct scientific research at certain institutions, including the TU/e and doctors in training to become specialists: they do not have to meet an income standard. Workers who meet this requirement are exemptfrom paying tax on up to 30% of their salary. The ruling was intended as a compensation for the extra expenses expats make when they move the Netherlands. It’s financially attractive for expats, and it can make working in the Netherlands fiscally interesting for them – one of the reasons why most large companies don’t want the ruling to be scrapped. Union FNV on the other hand has campaigned to have the ruling abolished altogether because it considers the current ruling to be an ‘excessive compensation that is beneficial in particular to high income earners.’

To be clear, practically no one in the Netherlands earns 216,000 euros. The Balkenende norm is a standard according to which publicadministrators in the Netherlands aren’t allowedto earnmore than 130 percent of the Dutch prime minister’s salary. Most expats earn much less than 216,000 gross a year. This means that most workers won’t be affected by the changes to the 30 percent ruling.

Shorter duration

In 2019, the government already shortened the duration of the ruling from 8 to 5 years. This was done because research showed, among other things, that extra costs (moving and travel costs in particular) decreased over time. The term of similar rulings in other countries is usually five years too.

Information provided by TU/e’s HRM reveals that hardly any questions came in regarding the possible abolishment of the tax break. Still, the topic is much discussed by expats, as can be seen in the Facebook group Expats in Eindhoven, which has many topics pertaining to this issue. TU/e currently has 2528 international employees, but it is unclear whether these workers make use of the 30 percent ruling. It’s only limited for a limited period, and people who lived within 150 kilometers of the Dutch border aren’t eligible. In addition, many PhD students, who count as employees for the TU/e, make less than 43,000 euros.

Addition: TU/e's HRM department reports that about 700 TU/e employees use the tax discount.