1 min

30% ruling to be capped

Dutch government plans to introduce a salary cap for the 30% ruling

On 20 May 2022, the Dutch government announced their plans to limit the application of the 30% ruling to a maximum salary equal to the maximum income for government employees (the so-called “WNT standard”, also referred to as the “Balkenende standard”), which is €216,000 in 2022 and subject to change annually.

Currently, the 30% ruling is applicable to all current employment income (i.e. no cap). Consequently, the effective income tax rates are effectively reduced by 30%, meaning that the highest income tax rate of 49.5% is effectively reduced to 34.65% (because 30% of the wage is tax exempt).

The proposed change in legislation should only impact expats who earn more than the Balkenende standard (currently €216,000). Furthermore, it has been announced that the amendments will be implemented gradually in three years, but it is not yet clear when the new legislation becomes effective. More information is expected late September 2022.

Questions? Feel free to reach out. Happy to chat further on this topic.

📝 Disclaimer: The above serves as general information and not professional tax advice.

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