The new Dutch government’s budget sent a clear message to highly-skilled internationals in the Netherlands: you are still welcome. The surprise decision to reverse a proposed major cut to the 30% ruling has gone down well with employers, tax advisors and internationals themselves.

“The biggest news is that what was called the 30% ruling goes back to the old way of calculation for a full period of five years,” said a spokesman for Blue Umbrella, a tax advisor for thousands of international residents. “They did it because they see the Netherlands becoming less popular with highly-skilled migrants.

“This community goes where they can earn the most money and if there are better opportunities in Portugal or Italy, they will go there: I think we were already seeing some of this effect,” the spokesman said.

High costs

The “30% ruling” is a tax break to compensate for the relatively high tax rates in the Netherlands and extra costs of living abroad: new internationals are effectively forced to start living in the highest-priced rental sector and are unlikely ever to be eligible for social housing.

Last year, however, parliament passed a motion from MP Pieter Omtzigt  to reduce the tax break. Instead of having five years (the typical length of stay) with 30% of their income untaxed, highly-skilled migrants meeting strict requirements for the ruling would get 20 months at 30%, 20 months at 20% and 10 months at 10% untaxed.

Fewer expats

A report for the government showed the changes would wipe out all of the €128.5 million fiscal benefit brought by migrant labour in creating jobs and generating tax income. The number of highly-skilled migrants was also projected to drop by up to a fifth.

But the new budget has restored the old ruling, while reducing the benefit slightly to 27%. “This is good news,” said the Blue Umbrella spokesman. “It also sends a message that the Netherlands is still an attractive place for highly-skilled migrants: we need you!”

Income tax

In terms of other changes, most groups will be slightly better off, although a slight reduction in the first tax bracket will be offset by lowering the standard tax credit and a higher second tax band rate. Once you factor in inflation, there is unlikely to be much difference for most people – although those investing in a second property will pay lower property transfer tax of 8% from 2027.

Some incentives to go green, which had already been removed by the previous government, will not return. A previous tax break on solar panels is being wound down and benefits for buying a new or second-hand electric vehicles will be phased out in 2030.

Value-added tax

For people who run a bed and breakfast or work in hospitality, however, tax is set to go up. From January 1, 2026, the value-added tax rate will rise from 9% to 21% for overnight stays. There are also rises planned for visits to the theatre and museums, books and sport.

The government has reserved money to deal with refunding people for its previous, unlawful taxes on their wealth – in the tax band known as “box 3 – but it is still unclear how this will work in practice and who will qualify.

“For the rest, nothing much has changed,” said the Blue Umbrella spokesman. “At the end of the day, we are a rich country, and many of the taxes go to the healthcare system and equalising income. There’s a lot of attention for problems with a small group of immigrants. But highly-skilled migrants are still very welcome.”