The 30% ruling is an important reason for many international employees to move to the Netherlands. However, there are situations where this tax facility is not available, expires, or offers insufficient benefits. Fortunately, various alternatives exist that can help expats reduce their tax burden and optimize their net income. In this article, you’ll discover what options are available for international professionals seeking tax advantages beyond the 30% ruling.
Whether you don’t qualify for the 30% ruling, have already maximized its use, or simply want to explore other tax strategies, there are various ways to improve your financial situation in the Netherlands. From utilizing international tax treaties to optimizing secondary employment conditions, the possibilities are more diverse than you might think.
Why Do Expats Seek Alternatives to the 30% Ruling?
The 30% ruling has various limitations that force international employees to seek other tax solutions. One of the main challenges is the income threshold of ā¬46,660 for 2025, which means many professionals with lower salaries don’t qualify for this facility.
Additionally, the ruling is temporary in nature, with a maximum duration of five years for new applications. For expats who want to stay in the Netherlands longer, this tax advantage therefore expires. Recent legislative changes make the situation even more complex. From 2024, there’s a salary cap of ā¬233,000, and for new users, the percentage will be reduced to 27% from 2027.
The abolition of partial foreign tax liability for box 2 and box 3 from 2025 also means that expats must pay more tax on their assets and investments. These changes make it essential for international employees to develop alternative tax strategies.
Tax Benefits Through International Treaties
The Netherlands has an extensive network of tax treaties with more than 90 countries, which can offer significant benefits to international employees. These treaties are specifically designed to prevent double taxation and can lead to substantial tax reduction.
For expats from certain countries, these treaties can offer benefits such as:
- Reduction of withholding tax on dividends and interest
- Exemption from tax on certain types of income
- Possibility to offset foreign taxes
- Special arrangements for pension payments
For example, employees from countries such as the United Kingdom, Germany, or the United States can often benefit from specific provisions in their respective tax treaties. However, it’s crucial to seek professional advice, as the application of these treaties can be complex and depends on individual circumstances.
Optimization of Deductions and Expense Allowances
An effective way to reduce your tax burden is by maximizing deductible expenses. International employees can often deduct more costs than they realize, especially when these are related to their move to the Netherlands.
Important deductions for expats include:
- Moving costs: Transportation costs, household contents insurance, and temporary storage
- Travel expenses: Commuting above the threshold of ā¬0.19 per kilometer
- Training costs: Courses and training for professional development
- Double housing costs: When you temporarily need to maintain two residences
- Extraordinary expenses: Specific costs due to your international situation
For expats who still have financial obligations in their home country, these can often be claimed as deductions. Consider mortgage interest on a property abroad or alimony to an ex-partner in another country.
Salary Sacrifice and Secondary Employment Conditions
Salary sacrifice arrangements offer international employees a powerful way to optimize their net income without using the 30% ruling. With these arrangements, you exchange part of your gross salary for tax-advantageous secondary employment conditions.
Popular salary sacrifice options include:
| Employment Condition | Tax Advantage | Maximum Amount |
|---|---|---|
| Lease car | Addition from 22% | No maximum |
| Additional pension accrual | Tax deferral | Depends on tax space |
| Company bicycle | Fully exempt | ā¬749 per year |
| Health insurance | Gross reimbursement | Actual costs |
Additionally, expats can benefit from specific arrangements such as international health insurance, which is often more advantageous than Dutch health insurance, or reimbursements for international school fees for their children.
When Is Emigration Fiscally Attractive?
For some international professionals, emigration to a country with a more favorable tax climate can be an attractive alternative. This is especially relevant for expats with high incomes who no longer benefit from the 30% ruling or for whom the Dutch tax burden becomes too high.
Countries often considered include:
- Switzerland: Low tax rates and favorable arrangements for expats
- Singapore: No wealth tax and low income tax
- United Arab Emirates: No income tax for individuals
- Portugal: Non-habitual resident program with tax benefits
When considering emigration, however, you must take various factors into account. The impact on your career, the costs of moving, the consequences for your family, and long-term planning are all crucial considerations. Exit taxes may also apply when leaving the Netherlands.
It’s essential to conduct a comprehensive compliance audit before making such a decision. We help international professionals evaluate their current tax situation and identify the most suitable alternatives for their specific circumstances.
The 30% ruling is just one of many tax instruments available to international employees in the Netherlands. Through a combination of international treaties, smart deductions, optimized employment conditions, and strategic planning, you can often achieve comparable or even better tax results. The most important thing is to thoroughly research your options and seek professional advice to determine the best strategy for your situation. For personalized guidance on your specific circumstances, contact our tax experts.
