Netherlands Tax Guide: the 30% Ruling Becomes 27% in 2027

The Netherlands sits 208th out of 217 in our world ranking, with a FiScore of 3.2 out of 10. It is not a low-tax country and it does not pretend to be.

It is here for one regime, and that regime is being cut.

The expat ruling, and the date that matters

An employee recruited from abroad can receive part of their salary free of Dutch tax, for five years, with no expense receipts to produce. That is the ruling, and it is the reason a great many people take a Dutch job rather than a German one.

Employees recruited before 2024 keep 30%. That grandfathering matters: two colleagues doing the same job can be on different rates for years, purely by hiring date.

If you are negotiating a Dutch offer for a 2027 start, the ruling is worth three percentage points less than every guide currently tells you, and the salary floor is higher.

The three boxes, which is how the Dutch system actually works

Dutch tax does not have one base. It has three, taxed separately, and reading anything about the Netherlands without this is guesswork.

Box 3 is the one to understand. It taxes savings and investments not on what they actually earned, but on a notional return the state assumes you made. In a bad year you pay anyway. That construction has cost the Dutch state several defeats before the Supreme Court, and a replacement is still being built.

For anyone moving with a portfolio rather than a salary, box 3 matters more than the ruling does.

Companies

Corporate income tax runs at 19% on the first EUR 200,000 of profit and 25.8% above. The first rate is genuinely favourable to a small company; the second is unremarkable in western Europe.

The Netherlands remains a major holding jurisdiction, thanks to the participation exemption covering dividends and gains on a qualifying subsidiary, and to one of the widest treaty networks in the world. It has, however, tightened its anti-abuse rules under European pressure: pure conduit structures, long its speciality, no longer work.

VAT is 21%.

If you are American

The ruling reduces Dutch tax, not American tax. Worse, it can reduce your foreign tax credit precisely when you need it: less Dutch tax paid means less credit to set against the US liability, so part of the benefit can end up flowing to the IRS rather than to you.

Whether that happens depends on your numbers, and it is the single calculation an American should run before treating the ruling as a pay rise.

The drawbacks

Five years, and it used to be longer. The ruling ran for eight years until 2019, then five. It has now been cut in rate as well. The direction of travel is one way.

Housing is the real constraint. In Amsterdam, Utrecht and Eindhoven, finding somewhere to live is harder than finding the job.

Box 3 taxes you on gains you may not have made, and the reform is not finished.

Ordinary rates are high. Take the ruling away and the Netherlands is a 49.5% country.

So, who is the Netherlands for?

• A salaried professional recruited from abroad: the ruling is real money, and it is worth timing a start date around the 2027 change.
• A small company owner: 19% on the first EUR 200,000 is a good rate in western Europe.
• Someone living off a portfolio: look hard at box 3 first.
• Anyone outside the ruling: this is a high-tax country with excellent infrastructure, and the tax case is not the reason to come.

The full table of Dutch rates is on our Netherlands page, and the comparison tool puts it next to anywhere else. Before deciding anything, read how to actually leave.

Sources

Figures verified in August 2026 against Dutch government guidance and firms established in the Netherlands, including the 2027 rate and the salary thresholds. An error reported to us gets fixed.

This page informs, it does not advise. Before deciding anything, talk to a professional who will look at your situation, as our terms of use set out.