Guide to the 30% Ruling in the Netherlands (2026 update)

The Netherlands has long been an attractive destination for highly skilled foreign workers, thanks in part to the 30% ruling. This tax advantage scheme, designed to compensate for the extra costs of living abroad, can significantly reduce your tax burden.

This guide will provide an in-depth look at the 30% ruling for 2026, with a particular focus on how foreign entrepreneurs can leverage this ruling when setting up their own Dutch BV (private limited company).

In recent years there has been discussion about the sustainability of the ruling. It is important to know that while the benefit remains at 30% for 2026, this is scheduled to drop to 27% in 2027. However, a new government is expected to be formed in early 2026 that seems eager to keep the 30%-ruling as it is. A downwards adjustment of the tax advantage with a few percent could happen from 2027 and onwards, but from what we see, we do not expect major changes anytime soon.

What is the 30% Ruling?

Officially known as the “30% facility for incoming employees,” this tax benefit allows employers to provide a tax-free reimbursement to employees coming from abroad to work in the Netherlands. The ruling has two main components:

1. Employers can give a tax-free refund for expenses the employee incurred in making the transfer to the Netherlands.
2. More significantly, employers can provide 30% of the employee’s wage (including the reimbursement) completely tax-free, without needing to prove that these costs were actually incurred.

Both the employer and employee must submit an application to qualify for this facility.

Recent and upcoming changes

Below are the main changes for 2026:

• The most important update is that the previous “30/20/10%” scaling back has been abolished. This means that the ruling will remain at 30% for 2026.
• Starting January 1, 2027, the rate will permanently drop to 27% for all holders who started in 2024 or later. A small nuance: it is not unlikely that this will be reversed or changed by the a new incoming government (most likely a centre-right coalition that is expected early 2026)
• The ruling now applies to a maximum salary of €262,000 (2026 figure) with a tax-free allowance capped at €78,600. This maximum is based on the Law on Standards for Top Incomes (Wet Normering Topinkomens) and is adjusted annually. Transitional arrangement: For employees who were already using the 30% ruling in December 2022, the salary cap will not apply until January 1, 2026.
• The maximum duration remains 5 years, but this includes any previous periods of stay or work in the Netherlands during the last 25 years.

It is important to know that those who obtained the ruling by December 31st 2023, keep 30% after 2027 even as the ruling as planned drops to 27%.

The 30% Ruling and the Rental Market

Your 30% ruling approval serves a secondary function beyond tax savings: it acts as a credibility certificate. In a market where supply has dropped by 40%, landlords prefer applicants who have been institutionalized and vetted by the Dutch tax authorities.
— Leonor, Global Mobility Specialist

For self-employed founders or DAFT entrepreneurs, the 30% ruling letter is a vital tool to differentiate your application. Landlords are now extremely selective due to the 2024 ban on temporary contracts; showing you are a recognized highly skilled migrant often moves your file to the top of the pile.

Factor	2026 Reality
Lease Default	Nearly all new contracts are indefinite. Landlords avoid risk at all costs.
Income Proof	30% status proves verified credentials and high net income to skeptical agents.
Market Tip	Combine your status with 6-12 months of prepaid rent if you lack Dutch tax history.

Get Housing Support

Eligibility Criteria 30%-Ruling

To qualify for the 30% ruling in 2026, you must meet the following criteria:

1. Employment relationship
   You must have an employment relationship with a Dutch employer.
2. Recruitment from abroad
   You must be recruited from outside the Netherlands by your first Dutch employer, or you are on assignment in the Netherlands from another country.
3. Distance requirement
   Of the 2 years before your first working day in the Netherlands, you must have lived outside the Netherlands for more than 16 months, at a distance of more than 150 kilometres from the Dutch border.
4. Specific expertise
   You must possess specific expertise that is not or is only barely available on the Dutch employment market. This is usually determined by meeting the salary threshold:
   • €48,013 in 2026 for most employees
   • €36,497 in 2026 for employees under 30 with a master’s degree
   • No minimum for scientific researchers or doctors in training
5. Valid decision: You must have a valid ‘decision’ from the Dutch Tax and Customs Administration.

Business Structure and the 30% Ruling

The type of business structure you choose can affect your eligibility for the 30% ruling:

• Eenmanszaak (Sole Proprietorship): As a sole proprietor, you are not eligible for the 30% ruling. This is because the ruling is designed for employees, and as a sole proprietor, you are technically not an employee. All income in the sole proprietorship is taxed as personal income with a relatively high tax burden. Because of the various tax breaks designed for the sole proprietorship, this structure is usually still preferable over the BV with a 30%-ruling if you make roughly under EUR 70,000 and it is not likely that income will grow.
• BV (Private Limited Company): It is possible to qualify for the 30% ruling as a director/employee of your own BV. However, the BV typically needs to be established before your arrival in the Netherlands.

The BV + 30% Ruling Strategy for Entrepreneurs

As a foreign entrepreneur, you can set up your own Dutch BV and then employ yourself, potentially qualifying for the 30% ruling. Here’s a detailed step-by-step guide:

1. Set up your Dutch BV from abroad
   • Find a business address in the Netherlands
   • Register your BV remotely
2. Create an employment agreement
   • Draft a 30% ruling labor contract before moving to the Netherlands
   • Include all relevant clauses for the 30% ruling
   • Consider additional perks like relocation cost compensation and children’s schooling cost compensation
3. Relocate to the Netherlands
   • Only move after completing steps 1 and 2
   • Remember that relocation costs can be expensed in your BV
4. Obtain your BSN number (social security number)
   • Register at the Dutch municipality to get your BSN
   • EU citizens can register as citizens of the union
   • Non-EU citizens may need to complete a visa application procedure
5. Start the 30% ruling application process
   • Use your BSN number, signed labor contract, and proof of foreign address
   • The application typically takes 4-6 weeks to process
6. Begin business operations
   • Sign contracts on behalf of your BV
   • Obtain a VAT number for invoicing
   • Set up a business bank account
7. Activate your wage tax number for payroll
8. Apply the 30% ruling to your salary
   • You can apply the ruling retroactively from the start of your labor contract
   • Work with your accountant to ensure correct application
9. Calculate your expected net salary – see next paragraph

Retroactive Applications

The timing of your 30% ruling application is critical. While retroactive application is possible, it must be filed within 4 months of your employment start date in the Netherlands. For example, if you started working on January 1, you have until April 30 to submit your application. Missing this 4-month window means permanently losing the opportunity to claim the ruling for that employment period. This is particularly important for entrepreneurs setting up their own BV – you must establish the employment relationship and submit the ruling application within this timeframe. Even if all other conditions are met (salary threshold, distance requirement, etc.), applications filed after the 4-month period will be rejected without exception.

Calculating your 30% ruling salary

To calculate the preferred salary for your 30% ruling, you should first see if you meet the threshold. This scenario is based on a single BV with a consultant without many expenses other than the director’s salary.

Calculate if you meet the threshold

The threshold is roughly €69,000 in salary income. If you have less, you are usually better off with a sole proprietorship.

In the first year you will typically have at least €4000-5000,- in expenses (setup costs, accounting etc.), so this means that you will need at least +/- €70,000 in annual revenue in the BV. Minus expenses (including your salary), you will be left with 0 profit in the BV, meaning you will not need to pay corporate income tax (19%).

So, if you have a gross income (salary) from the BV of over +/- €70,000 you can continue with the BV. To calculate what you should pay out as salary you would typically take your gross salary and deduct 30%. The amount that is left is your gross salary that you would pay income tax over.

Example calculation with a €70,000 gross income

Example calculation with a €100,000 gross income

This comparative table clearly demonstrates the potential financial benefit of the 30% ruling for eligible employees at a higher income level.

Please note that these calculations are purely indicative and serve as a general illustration of the potential impact of the 30% ruling. In practice, the actual financial benefit may vary significantly due to numerous factors, including but not limited to individual tax circumstances, specific income brackets, changes in tax laws, personal deductions, and the particular implementation of the 30% ruling in each case. It’s always recommended to consult with a qualified tax advisor for a precise calculation based on your specific situation.

Application Process and Timing

The timing of your application is crucial:

• You can apply for the 30% ruling if the employment contract was signed before the employee began residing in the Netherlands.
• For example, if an employee signed a contract on April 1 and started living in the Netherlands on April 15, the 30% ruling application would be legitimate.
• However, moving to the Netherlands, then signing the contract, and then applying for the arrangement is not allowed.

Key steps in the application process:

1. Gather necessary documents (employment contract, proof of residence abroad, etc.)
2. Complete the application form
3. Submit the application within four months of starting work in the Netherlands (application fee for 2026 is 423 euros)
4. Wait for the decision (usually 4-6 weeks)

While you can apply for the 30% ruling yourself using the official application form, it’s often beneficial to outsource this process to a tax advisor or specialized service. The application can be complex, and mistakes can lead to rejection.

Extraterritorial Costs (ETK scheme)

Under the 30% ruling, certain costs are considered extraterritorial and can be reimbursed tax-free. These include:

• Extra cost of living due to higher prices in the Netherlands
• Costs for a familiarization trip to the Netherlands
• Fees for official personal documents
• Costs for medical examinations and vaccinations
• Double housing costs
• Initial housing costs (excess over 18% of wages)
• Storage costs for personal belongings
• Travel costs to home country
• Additional costs for tax return preparation (up to €1,000)
• Language training costs
• Additional call charges for contacting home country

Update for 2026: Starting January 1, 2026, the ETK scheme (the alternative to the 30% flat rate) no longer allows tax-free reimbursement for utilities (gas, water, electricity) or private phone calls home.

30% Ruling and DAFT: A winning combination for Americans in 2026

For American entrepreneurs, the combination of the Dutch-American Friendship Treaty (DAFT) and the 30% ruling can be particularly attractive. DAFT allows American citizens to easily obtain a residence permit for self-employment in the Netherlands, while the 30% ruling provides significant tax benefits.

Here’s how it works:

1. Use DAFT to obtain your residence permit and set up your Dutch business.
2. Structure your business as a BV and employ yourself.
3. Apply for the 30% ruling as a highly skilled migrant employed by your own BV.

This combination offers a streamlined path to both living and working in the Netherlands while enjoying substantial tax benefits. You can read more about the requirements, timeline and fees in our guide on DAFT.

Typical costs for a 30%-ruling application

How much does a 30% ruling application typically cost?

Applying for the Dutch 30% ruling involves professional fees, as the application requires specific documentation and expertise to maximize approval chances. You can successfully apply yourself (the application is a joint application submitted by employee and employer, in case of an expat with a BV, this will be the same person),

Standard Application Costs

Applying yourself is free. We highly recommend hiring a tax professional or accountant who can help you. A standalone 30% ruling application typically costs around €650. This covers the preparation and submission of your application to the Dutch Tax Authority.

Full Package

If you are looking for an extensive service package including: For entrepreneurs setting up their own company (BV) you should be looking for a more comprehensive package is available typically from €1,500-2,000. Such packages typically include:

• Employment contract
• Required addendum documentation
• Customized 30% ruling application
• Wage tax number application

On top of that there will be notary costs for establishing the BV itself, which typically range from €1,000 to €1,500 depending on your company structure. If you already are a resident this can be done cheaper with some providers.

Other costs

Beyond the application itself, you’ll need to arrange:

• BSN (personal identification number) from your local municipality. This is a free service arranged by the municipality you live in / move to.
• Dutch bank account for your company. You can have a decent business bank account for 10-15 euros per month.
• Optional: Business address. If you have a simple consulting business, you can normally register it at your home address without any problem. If you rather want a professional business address and virtual office with mail scanning service (practical if you travel a lot), typical costs are anywhere from 50 to 120 euros per month.
• Registration with the Dutch Tax Authority. There are typically no costs involved. As a resident of the Netherlands it is normally a straightforward process with few obstacles. In practice we do see that when clients set up the company before they have moved to the Netherlands, it can be challenging to obtain a VAT number. Assistance with this can be some back and forth with the tax authorities. Outsourcing this to a tax adviser or accountant will typically cost €500-1,000.
• Ongoing compliance for a simple BV consists of accounting, quarterly VAT returns, annual corporate income tax and annual accounts. Annual costs are typically between €1,500 and €3,000.

Success Rate 30% ruling in 2026

When applications are properly prepared and applicants meet the eligibility criteria, acceptance rates are very high. We hardly ever see an application being denied when all requirements are met. If you would like to have a free preliminary scan of your situation please reach out via the contact form below.

Case study: Transitioning from HSM employee to BV founder

A frequent inquiry for international professionals in the Netherlands is whether they can leave a corporate role to start a consulting agency under their own Dutch BV while maintaining their Highly Skilled Migrant (HSM) visa and 30% ruling.

The Scenario: “I am a Brazilian citizen working as an HSM with the 30% ruling. Can I set up my own BV, have it sponsor my visa, and keep my tax benefits?”

The 2026 Requirements for success

Yes, this transition is possible, but it requires strict adherence to 2026 administrative and financial standards set by the IND and the Tax Authority.

• 1. Recognised Sponsor Status: To sponsor your own visa, your BV must apply for “Recognised Sponsor” status with the IND.
  • Application Fees (2026): The fee is €2,539 for small businesses (fewer than 50 employees) or €5,080 for larger entities.
  • Individual Permit Fee: Each HSM residence permit application costs €423.
• 2. Minimum Monthly Salary (2026): Your BV must pay you a gross monthly salary (excluding 8% holiday pay) that meets the indexed 2026 standards:

Alternative Residency: The EU Blue Card is often preferred by those who may wish to move to another EU country in the future, as it simplifies the process of changing residency within the Union.

Salary Overlap: Both the HSM and EU Blue Card permits can be used in conjunction with the 30% ruling, provided the salary thresholds are met.

Fees: Application fees for an EU Blue Card in 2026 are generally aligned with standard HSM permits at €423. This does not include consulting fees.

• 3. The 3-Month Ruling Window: To avoid losing your 30% ruling, you must sign your new employment contract with your BV within three months of your last working day at your previous employer.
• 4. 2027 Rate Transition: While you retain a 30% tax-free allowance through 2026, be prepared for the scheduled decrease to 27% starting January 1, 2027, for all holders who began the ruling in 2024 or later.

Alternative: Payrolling

If the initial €2,500+ investment for sponsor status is too high, you can use a payrolling company. They already have IND recognition and can employ you on behalf of your BV. Expect to pay a service fee of approximately €700 per month in addition to the mandatory HSM salary costs.

Case Study: Returning to the Netherlands – 30% Ruling for Former Students

Many international professionals who completed a Master’s degree or PhD in the Netherlands eventually return for work. Whether you qualify for the 30% ruling depends on your specific timeline and residency status at the time of recruitment.

The Scenario: “I finished my Master’s in the NL, worked abroad for two years, and now a Dutch company wants to hire me. Can I still get the 30% ruling?”

Critical Factors for Former Students

To qualify upon your return in 2026, you must navigate three specific hurdles:

• 1. Recruitment from Abroad: You must be living outside the Netherlands when you sign your new employment contract. If you are already in the country on an “Orientation Year” (Search Year) visa when you sign, the Tax Authority generally considers you a local hire, making you ineligible.
• 2. The 150km Distance Test: You must have lived more than 150km from the Dutch border for at least 16 out of the 24 months prior to your new start date. Your previous time spent studying in the Netherlands counts against this 24-month window, so you typically need to have been away for at least two years to reset your eligibility.
• 3. Internship Impact: If you performed a paid internship in the Netherlands where you were registered as an employee and paid payroll tax, that date may be viewed as your “first day of work” in the country. This can complicate or even disqualify a later application if the salary at that time did not meet the thresholds.

2026 Graduate Salary Requirements

If you are under 30 and hold a Master’s degree from a Dutch university (or an equivalent foreign degree), you qualify for a lower salary threshold. However, this is indexed annually:

Note: This amount is the taxable salary after the 30% deduction. If your salary falls even slightly below this mark during the year, the ruling may be permanently revoked.

How do you move forward?

The 30% ruling remains a valuable tool for attracting international talent to the Netherlands, including entrepreneurs setting up their own businesses. While the rules have changed somewhat over the last few years, with proper planning and execution, it is still one of the best tax cuts for small entrepreneurs and relocating foreign employees in Europe.

If you would like to get an offer for the 30% ruling company as an entrepreneur or consultant, please contact us below.