Tax scheme for foreign employees shortened from eight to five years

The Government plans to shorten the term of the tax scheme for incoming employees, the so-called 30%-ruling, from 8 to 5 years, as from 1 January 2019. This was approved by the Council of Ministers on the proposal of the State Secretary for Finance. In doing so, the Government gives effect to a recommendation from the evaluation of the 30%-ruling. The shortened term will apply to both new and existing cases.


The 30%-ruling gives employers the opportunity to reimburse a part of the wage, up to a maximum of 30%, tax-free to employees from abroad who are temporarily coming to work in the Netherlands. It is a reimbursement for the extraterritorial costs that these employees may incur when coming to work in the Netherlands, such as travel expenses, accommodation costs and maintenance.

The scheme aims, among other things, to attract employees from abroad with a specific expertise that is scarce or not present on the Dutch labour market. The conditions of the scheme are left unchanged.


The evaluation of the 30%-ruling was performed in 2017 by the research and consultancy firm Dialogic. The evaluation showed that approximately 80% of the employees do not make use of the scheme for more than 5 years. A substantial part of the approximately 20% employees who do make use of the ruling for the maximum term of 8 years, do not relocate temporarily, however, they relocate to the Netherlands for the long term. Moreover, neighbouring countries with similar schemes nearly all apply a maximum term of 5 years.

The Government intends to incorporate the changes in the 2019 Tax Plan which will be made public on Budget Day in September.