How it works
An employee can receive up to 30% of the salary as a tax-free allowance. This is possible if the employee is recruited from more than 150 kilometres from the Dutch border and has specific expertise. In 2026 the salary norm is €48,013. The norm applies to the taxable salary after the allowance. For employees under 30 with a master’s degree, the norm is €36,497. The ruling lasts at most 60 months.
From 1 January 2027 the tax-free share becomes 27% for employees who received the ruling from 2024. Employees who had the ruling before 1 January 2024 keep 30% for their full term. The allowance is calculated on at most the public-sector pay ceiling (€262,000 in 2026).
The employer and the employee apply together within four months after the first working day. The ruling then applies from the first working day. If they apply after that deadline, the ruling applies from the first day of the month after the month of the application.
A founder who relocates to the Netherlands and is employed by their own BV can also qualify. The conditions for recruitment, distance and the salary norm must be met. For new cases, the partial foreign tax liability that came with the ruling ended in 2025.
Example
An engineer from Mumbai starts in Eindhoven in 2026 on a salary of €90,000. Her employer pays €27,000 tax-free and withholds tax on €63,000. Her ruling started after 2023, so the tax-free part is 27% from 2027. That is €24,300. Her net income is around €12,000 a year higher because of the ruling.
The figures
Every rate for 2026 is listed in Netherlands tax rates 2026, and the figures for 2027 are in Netherlands tax rates 2027.
Questions people ask
Can a DGA of their own BV get the ruling?
Yes, when the DGA is recruited from abroad. The DGA must also have lived more than 150 kilometres from the border for more than 16 of the 24 months before starting work. The salary of the DGA after the allowance must be at least the salary norm. The BV files the application as employer.
What happens when the ruling ends?
The full salary becomes taxable. Many employees and their employers plan the salary and the pension for that moment in advance. You can read more about this on the page about the end of the ruling.
Holdwise, Hoofddorp. We keep this definition in line with our Dutch and German glossaries, and the figures are those for the tax year 2026. Updated 30 September 2026.
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