Expats and the 2025 tax plan: what to expect
As an expat living in the Netherlands, you’re probably already aware that the Dutch tax system is quite complex. With the recent changes proposed for 2025, there are a few updates you’ll definitely want to know about. Whether it's the 30% ruling, adjustments in income tax, or pension transfers, these changes could impact your finances. Curious how? Only one way to find out!
Income Tax changes for 2025 (Box 1)
In 2025, the tax rates for income from work and housing in Box 1 will see the following adjustments:
| Income Bracket | Tax Rate 2024 | Tax Rate 2025 |
|---|---|---|
| Up to €38.441 | 36.97% | 35.82% |
| €38.441 - €76.817 | 36.97% | 37.48% |
| Above €76.817 | 49.50% | 49.50% |
There’s a slight decrease for lower incomes, which is compensated by a sight increase for the middle bracket.
Apart from the rates, the tax credits are important as well:
The general tax credit will decrease from €3,362 to €3,068.
The labor tax credit will increase slightly from €5,532 to €5,599.
Starting in 2025, the general tax credit will be based on your total income (Box 1, Box 2, and Box 3). If you have other income (from savings and/or investments) this might reduce the credit that is calculated through payroll, and you could end up paying back some tax credits through your final tax bill.
Abolition of partial non-residency status
This change was already announced in 2023, but it’s good to be aware of this. From 2025, the partial non-residency status will be abolished. Currently, expats using the 30%-ruling can opt to be treated as non-residents for Box 2 (dividends) and Box 3 (savings and investments) income, even if they live in the Netherlands. This option will no longer be available starting January 1, 2025.
If you already benefited from the 30%-ruling in December 2023 though, you are covered by transitional law and can continue to use the partial foreign tax liability until the end of 2026.
If you’re not covered by transitional law, make sure that you know the value of all your assets at January 1st, 2025. You will need this when filing your 2025 income tax return in 2026.
30%-Ruling Changes
Last year’s proposal to reduce the 30%-ruling to 10% after five years has been reversed. For 2025 and 2026, the full 30% tax-free allowance will remain available to eligible expats.
For 2025, the new 30%-ruling salary requirements will be:
€46,660 for employees
€35,468 for those under 30 with a master’s degree
Proposed changes as from 2027
As from 2027, new restrictions will be introduced though. The maximum tax-free allowance will be reduced to 27%. So as from 2027, we’ll have to get used to the term “27%-ruling”.
In addition, there will be a major increase of the applicable salary requirement. The exact figures of the 2027 salary requirements are not known yet, but these should be around 10% higher than the current salary requirement.
For employees who already benefitted from the 30%-ruling before 2024, transitional law will apply. For them, the maximum tax-free benefit will remain 30% and the old (although indexed) salary requirements will remain applicable.
Example: net income calculation for 2025
To give you a picture of how the proposed 2025 tax changes might affect your take-home pay, we’ve prepared a detailed gross-to-net calculation. This example factors in the adjusted income tax rates, changes in tax credits, and the 30%-ruling benefit for eligible expats.
Click to enlarge the picture
Of course, as the changes are still subject to change until parliament accepts the proposals, the figures are purely indicative.
International pension transfers
From 2025, transferring your Dutch pension to a foreign provider will become easier. Previously, strict conditions like needing to provide financial security and bans on early withdrawals made it hard to move pension funds abroad. These rules were found to violate EU laws on the free movement of workers. With the changes, expats who worked in the Netherlands for a few years can now transfer their pensions more freely, helping to consolidate your retirement funds without unnecessary restrictions.
Need help?
Navigating Dutch taxes is already complex, and with the new changes coming in 2025, it’s only getting trickier. Whether it's the adjustments in income tax, the 30%-ruling, or pension transfers, these updates can have a big impact on your finances. If you need help making sense of it all—or if you want to make sure your 2024 tax return is done correctly before the new rules kick in—feel free to reach out. We're here to guide you through the process and make sure everything is handled smoothly!
