30% ruling becomes 27% ruling – higher salary requirements
Partial rollback of moderation 30% ruling and increase in salary requirement
The letter of amendment to the Tax Plan 2025 bill regulates that the moderation of the 30% ruling from the Tax Plan 2024 (“30%-20%-10% ruling”) will be largely reversed and the maximum untaxed compensation will be set at a constant flat rate of 27% as of January 1, 2027. In the years 2025 and 2026, a 30% rate will apply to all incoming employees.
Furthermore, the salary requirement will be increased from €46,107 to €50,436 and the salary requirement for incoming employees under the age of 30 with a master’s degree from €35,048 to €38,338. These are stand-alone increases and thus still exclude the table correction factor (inflation adjustment) for 2025. The actual salary requirements for 2025 will therefore be even higher. Thereafter, salary requirements will be indexed annually based on the table correction factor.
For incoming employees who applied the 30% ruling prior to 2024, respectful transitional law applies. For them, a percentage of 30% and the old (indexed) salary requirements will continue to apply until the end of the term. Thus, if the ruling was applied in December 2023, the percentage remains 30%. If the regulation was first applied in January 2024, then the percentage will be reduced to 27% as of January 1, 2027, and a higher salary requirement will also apply to this employee as of 2025. Thus, different salary requirements will apply for a number of years depending on when the ruling was first applied.
The upper limit for the salary that may fall under the 30% ruling will not be tinkered with, except with the table correction factor as of January 1, 2025. The 30% ruling may be applied over a maximum of €223,000 in 2024.
The lower percentage and higher salary requirement mean that the benefit will be lower and fewer expats will be able to use the ruling but the adjustment will make it better targeted and also allow it to remain existing within the current political playing field.
