When Your 30% Ruling Expires
What happens when your 30% ruling expires, how to prepare financially, and what changes to expect in your tax situation.
Key Takeaways
- The 30% ruling expires after 60 months (5 years). There is no extension or renewal.
- When it expires, your net salary drops significantly — typically €400–€1,200 per month depending on your income.
- You also lose partial non-resident status, meaning all worldwide assets become subject to Box 2 and Box 3 tax.
- The combined annual tax increase can be €10,000–€25,000+ depending on your salary and assets.
- Start preparing at least 12 months before the ruling ends.
What Exactly Changes
The expiry of the 30% ruling triggers multiple simultaneous changes. Here is the complete picture:
Box 1: Your Salary
Before expiry: A percentage of your salary (30%, 20%, or 10% depending on your phase) is paid tax-free.
After expiry: Your entire salary is taxed as regular Box 1 income. No portion is tax-free.
| Gross Salary | Net With 10% Ruling (Phase 3) | Net Without Ruling | Monthly Loss |
|---|---|---|---|
| €50,000 | ~€3,090/month | ~€2,850/month | ~€240 |
| €75,000 | ~€4,375/month | ~€3,970/month | ~€405 |
| €100,000 | ~€5,440/month | ~€4,870/month | ~€570 |
| €150,000 | ~€7,520/month | ~€6,610/month | ~€910 |
If you are still in Phase 1 (30%) when the ruling expires (e.g., due to the ruling being revoked or a transitional situation), the drop is much larger.
Good to know
The 30/20/10 schedule actually softens the blow compared to the old system. Under the old flat 30% system, the drop at expiry was from 30% tax-free to 0% tax-free in one day. The new schedule gradually reduces the benefit, so the final transition (from 10% to 0%) is smaller.
Box 2: Substantial Interests
Before expiry (with partial non-resident status): Foreign substantial interests are exempt from Box 2 tax.
After expiry: All worldwide substantial interests are taxed. Dividends and capital gains from foreign companies you hold 5%+ in become taxable.
Box 3: Savings and Investments
Before expiry (with partial non-resident status): Foreign savings, investments, and property are exempt from Box 3 tax.
After expiry: All worldwide assets are included in Box 3. Foreign bank accounts, stock portfolios, bonds, and real estate abroad must be reported.
Other Changes
| Benefit | Before Expiry | After Expiry |
|---|---|---|
| Tax-free salary component | 30/20/10% | 0% |
| Partial non-resident status | Available | Not available |
| Driving licence exchange | Eligible | No longer eligible (but exchanged licences remain valid) |
| Tax credits (heffingskortingen) | Based on lower taxable income | Based on higher taxable income — credits may phase out more |
The Financial Impact: A Complete Example
Profile: Anna, €80,000 gross salary, €250,000 in foreign investments (held at a UK broker), €50,000 in a Dutch savings account. Currently in Phase 3 (10%).
Before Expiry
| Component | Tax Impact |
|---|---|
| Box 1: Salary taxed on €72,000 (after 10%) | Standard loonheffing |
| Box 3: Dutch savings only (€50,000) | Below threshold — €0 |
| Total extra benefit of ruling | ~€3,500/year (salary) + ~€3,000/year (Box 3 exemption) = ~€6,500/year |
After Expiry
| Component | Tax Impact |
|---|---|
| Box 1: Salary taxed on €80,000 (full amount) | Higher loonheffing (+~€3,500/year) |
| Box 3: All assets (€300,000 total) | After threshold: ~€2,500/year |
| Total annual tax increase | ~€6,000 |
For expats with higher salaries and more foreign assets, the increase can easily reach €15,000–€25,000 per year.
When Exactly Does It Expire?
The ruling expires exactly 60 months after the start date specified in your ruling decision letter (beschikking). This is typically your first working day in the Netherlands.
Important: Previous periods of Dutch employment or residency reduce the 60-month period. If you lived in the Netherlands for 6 months five years ago, those 6 months count — your ruling lasts only 54 months.
The exact end date is stated in your ruling decision letter. Check this document.
Preparing for Expiry: A 12-Month Plan
12 Months Before: Calculate Your New Tax Position
Run the numbers on your post-ruling tax situation. Calculate the Box 1 impact on your salary, Box 3 tax on all worldwide assets, and Box 2 impact if you have substantial interests.
9 Months Before: Negotiate With Your Employer
Discuss a gross salary increase to partially offset the lost benefit. Many employers expect this conversation and may have a policy for post-ruling salary adjustments.
6 Months Before: Review Your Asset Structure
Decide whether to restructure investments. Consider whether keeping assets at a foreign broker still makes sense (it will not provide tax benefits after expiry). Evaluate tax-efficient investment options in the Netherlands.
3 Months Before: Adjust Your Budget
Recalculate your monthly budget based on the new net salary. Adjust automatic savings, mortgage overpayments, and discretionary spending.
1 Month Before: Verify Payroll Changes
Confirm with your employer's payroll department that they will stop applying the ruling from the correct date. Verify that your first post-ruling payslip is correct.
After Expiry: File Your Tax Return Carefully
The year of expiry will have a mixed situation — part of the year with the ruling, part without. Make sure your tax return reflects both periods correctly.
Negotiating a Salary Adjustment
Many expats successfully negotiate a salary increase when their 30% ruling expires. Here are approaches that work:
The Cost-Neutral Argument
Your employer's cost does not change when the ruling expires — they pay the same gross salary. The ruling only affects the split between your tax-free and taxable portions. You can argue that a gross salary increase partially compensating for the lost benefit is fair, especially if your market value has increased during the 5 years.
Market Rate Argument
After 5 years in the Netherlands, your skills and experience have likely increased. Benchmark your salary against current market rates for your role and negotiate accordingly.
Retention Argument
Replacing an experienced employee is expensive (typically 50–200% of annual salary in recruitment and onboarding costs). A modest salary increase to retain you is often cheaper than hiring a replacement.
Tip
Start the salary conversation early — ideally 6–9 months before expiry. Employers need time to budget for salary increases. Springing it on them at the last moment reduces your negotiating position.
Tax-Efficient Strategies After Expiry
Box 3 Optimization
Once the ruling expires, all worldwide assets are taxable. Strategies to minimize Box 3 tax:
- Use the tax-free threshold — €57,000 per person (€114,000 for tax partners). Keep assets below this if possible.
- Pay off debts — Box 3 allows you to deduct debts from assets (above a threshold). Paying off your mortgage reduces your Box 3 base, but the mortgage interest deduction in Box 1 may be more valuable. Calculate both options.
- Green investments (groene beleggingen) — Investments in recognized green funds have a tax-free exemption in Box 3 of €26,715 per person (€53,430 for tax partners) in 2026, plus a 0.1% tax credit. Note: this exemption is being drastically reduced from 2027 onward and abolished from 2028.
Pension Contributions
Consider increasing your pension contributions. Pension contributions are pre-tax (reducing Box 1 income) and pension assets are not counted in Box 3. This is one of the most tax-efficient ways to build wealth in the Netherlands.
Tax Partner Benefits
If you have a tax partner, you can:
- Share the Box 3 threshold (€114,000 combined)
- Allocate Box 3 assets optimally between partners
- Allocate deductions to the higher-earning partner
Should You Stay in the Netherlands?
The end of the 30% ruling is a natural point to evaluate whether staying in the Netherlands makes financial sense. Factors to consider:
| Factor | Stay | Leave |
|---|---|---|
| Career opportunities | Strong local network, established career | Opportunities elsewhere |
| Social roots | Family, friends, community built over 5 years | Connections in home country |
| Tax burden | Higher than during ruling, but Netherlands has other benefits | May be lower in home country or other locations |
| Quality of life | Netherlands consistently ranks high | Depends on alternatives |
| Box 3 impact | Significant if you have large foreign assets | Varies by destination |
| Cost of living | High, especially housing | Varies by destination |
Good to know
Leaving the Netherlands has its own tax implications. You may face exit tax on certain assets (particularly Box 2 substantial interests), and the transition period requires careful planning. If you are considering leaving, consult a tax advisor who specializes in cross-border situations.
The Year of Expiry: Mixed Tax Situation
The year your ruling expires will have two periods:
- January to expiry date: Ruling still applies (reduced percentage per the 30/20/10 schedule)
- Expiry date to December: No ruling, full taxation
Your employer should adjust the payroll from the expiry date onward. When you file your tax return for this year, the Belastingdienst calculates the correct tax for the mixed period.
Partial non-resident status: You can only elect this for years in which you had the 30% ruling for at least part of the year. So the expiry year is the last year you can elect partial non-resident status. After that, all worldwide assets are reported.
Common Mistakes at Expiry
- Not preparing financially — The tax increase is predictable. There is no excuse for being surprised by it.
- Not negotiating a salary adjustment — Many employers are willing to adjust. Not asking is a missed opportunity.
- Forgetting the Box 3 impact — Expats often focus on the salary impact but forget that their foreign assets will now be taxed. For some, the Box 3 increase is larger than the Box 1 increase.
- Not filing the tax return for the expiry year correctly — The mixed year requires careful reporting. Consider using a tax advisor for this return.
- Making hasty decisions about leaving — Evaluate the full picture, not just taxes. Five years is long enough to build a life. Financial factors are important but not everything.
What to Read Next
- Partial Non-Resident Status — Understand what you are losing and how to maximize it while you still have it
- Box 2 & Box 3 Impact — The full effect on your investments and savings
- Common Mistakes — Avoid errors during the ruling period so you get maximum benefit before expiry