The Dutch Expat Tax Break: What Engineers Moving to the Netherlands Need to Know

Are you an engineer considering a job opportunity in the Netherlands? The Dutch Expat Scheme, commonly known as the 30% ruling, could make the move more financially attractive.

This tax facility allows eligible employees recruited from abroad to receive a tax-free allowance to help cover the additional costs associated with working in the Netherlands. However, eligibility depends on several conditions, and the rules are changing in 2027.

Here is what international engineering professionals need to know.

What is the Dutch Expat Scheme?

The Dutch Expat Scheme (expatregeling) is a tax facility designed to compensate eligible employees recruited from abroad for additional expenses associated with working in the Netherlands. These may include extra housing costs, travel expenses and other costs related to living and working in a different country.

Under the scheme, an employer may pay an eligible employee a tax-free allowance of up to a specified percentage of their salary, subject to the applicable rules and approval from the Dutch Tax Administration (Belastingdienst).

The scheme can apply for a maximum period of five years. However, the full allowance is not automatic: the employee must meet the eligibility requirements, the employer must apply, and the allowance actually paid may be lower than the maximum permitted.

Official guidance: The Dutch Expat Scheme (Business.gov.nl).

How does the 30% ruling work in 2026?

In 2026, the maximum tax-free allowance is 30% of the relevant salary, subject to the scheme’s conditions and salary limits.

For employees who fall under the rules introduced from 1 January 2024, the former 30/20/10 structure should not be used as a description of the general rules currently applying in 2026. The maximum percentage remains 30% throughout 2026.

The scheme is subject to a maximum salary amount. In 2026, the relevant annual salary cap is €262,000, meaning that the maximum tax-free allowance is €78,600 for an employee who qualifies for the full allowance throughout the year and meets the applicable conditions.

The allowance is not necessarily 30% of every employee’s total remuneration. The calculation depends on the scheme’s rules, the salary limits and the employer’s arrangements.

Official guidance: Dutch Tax Administration: applying for the Expat Scheme.

What changes from 1 January 2027?

The maximum tax-free percentage will decrease from 30% to 27% from 1 January 2027 for employees covered by the new rules.

The minimum salary requirement will also increase. The applicable thresholds depend on the employee’s circumstances, including whether they qualify for the reduced threshold for certain employees under 30 with a qualifying master’s degree.

Employees who were already benefiting from the scheme before 2024 may qualify for transitional arrangements allowing them to retain the 30% allowance for the applicable period, subject to the relevant conditions. The precise treatment depends on their individual circumstances and when the scheme began to apply.

For this reason, candidates and employers should check the transitional rules rather than assume that the same percentage applies to everyone.

Official guidance: The 30% ruling changes to 27% in 2027.

Who can qualify for the Dutch Expat Scheme?

Several conditions must be met. The principal requirements include the following:

• Employment in the Netherlands: the employee must work for an employer under an employment relationship.

• Recruitment from abroad: the employee must generally be recruited from outside the Netherlands or transferred from abroad within a multinational company.

• Specific expertise: the employee must meet the applicable salary criterion. In certain exceptional situations, an additional requirement relating to the scarcity of specific expertise in the Dutch labour market may apply.

• Residence-distance requirement: during more than 16 of the 24 months before their first working day in the Netherlands, the employee must generally have lived more than 150 kilometres in a straight line from the Dutch border. Specific exceptions may apply.

• Application and approval: the employer must apply to the Dutch Tax Administration, and the scheme must be approved.

Different salary criteria apply in certain circumstances, including for eligible employees under 30 with a qualifying master’s degree. The applicable amounts are subject to change.

Meeting one condition alone does not guarantee eligibility. Each candidate’s circumstances must be assessed against the complete set of requirements.

Official guidance: Dutch Tax Administration: eligibility for the Expat Scheme.

What does this mean for engineers considering a move?

For engineers considering an international career move, the Expat Scheme may improve the financial attractiveness of an offer. However, it should be assessed alongside the full employment package.

The salary, cost of living, accommodation, relocation expenses, travel to visit family and professional development opportunities can all influence whether a move makes sense financially and personally.

It is also important to remember that the employer is not obliged to provide the maximum tax-free allowance. Candidates should clarify whether the company intends to apply for the scheme, whether the candidate is likely to qualify and how the allowance will be reflected in the employment offer.

The tax benefit should therefore be treated as a potential advantage, rather than assumed income, until eligibility and the employer’s arrangements have been confirmed.

If you are considering a move, review the details of each opportunity carefully and ask the employer how relocation support and any applicable tax benefits would work in your individual situation.

Disclaimer: This article provides general information and does not constitute tax or legal advice. Eligibility, salary thresholds and transitional provisions depend on individual circumstances and the rules in force. Consult the Dutch Tax Administration or a qualified tax adviser for advice on a specific situation.

 

Sources

Government of the Netherlands, Business.gov.nl. The Expat Scheme (30% ruling) for foreign employees in the Netherlands. Overview of the scheme, eligibility criteria, maximum duration and changes to the rules. Read the official guidance.

Netherlands Tax Administration (Belastingdienst). Can I apply for the Expat Scheme (30% facility)? Official eligibility requirements, salary thresholds for 2026 and maximum tax-free allowance. Read the official guidance.

Netherlands Enterprise Agency (RVO), Business.gov.nl. 30% ruling: compensation for expats down to 27%. Official information on the reduction to 27% from 1 January 2027, higher salary requirements and transitional arrangements. Read the official update.

Netherlands Tax Administration (Belastingdienst). Expertise requirement. Official salary thresholds and specific expertise requirements for employees applying for the Expat Scheme. Read the official guidance.