Surprised by tax shifts
We see expats in the Netherlands get surprised the most by these two tax shifts:
· Changes to the 30% ruling, affecting your income.
· Box 3 taxes, affecting your savings and investments.
Let's unpack each.
Relying too much for too long on the 30% ruling
When expats move to the Netherlands with the 30% ruling, it’s easy to get used to it.
We see many build their monthly living expenses around that higher take-home pay.
The mistake?
Treating the 30% ruling as a permanent boost to your income, rather than a temporary tax incentive.
That tax break eventually ends, one way or another.
And then we see people scramble to fit their expenses around the take-home pay that “all of a sudden” dropped.
Also, between 2019 and 2026, the Dutch 30% ruling has undergone several significant legislative updates:
· The length of time was cut from 8 years to the current 5 years.
· The tax-free allowance was scaled down from 30% to 27% as of Jan 2027.
· No more option for expats to be treated as non-resident taxpayers for Box 2 and Box 3 in the NL (meaning your global savings, investments, and offshore accounts will fall under Dutch wealth tax).
· Higher baseline salary requirement starting in 2027, making it harder for lower-to-mid salaried expats to qualify.
Chances are these kinds of changes will keep happening.
Our recommendation: build your financial life as-if you do not have the 30% ruling, as-if you are on a local Dutch employment contract, and 100% of your salary is subject to Dutch income tax.
Why? Three reasons:
1. You don’t have to stay on top of the news, and do mental gymnastics all the time to figure out how the next legislative change will impact you.
2. Your lifestyle remains completely protected when the ruling ends, and you eliminate any stress and financial shock.
3. (The best part!) Every extra euro from the tax break becomes fuel for you to accelerate your long-term wealth building.
Letting Box 3 taxes eat into your hard-earned wealth
Ah, the infamous Box 3... one of my favourite financial topics to go on a rant about.
Which is exactly what I did a few months ago, in this article covering whether you can still build wealth and financial freedom in the Netherlands.
In short: wealth above a certain threshold is taxed annually in the so-called "Box 3."
This includes cash savings, investment portfolios, crypto, and any real estate that is not your primary home.
The Box 3 tax landscape is currently undergoing major legislative changes. Tax rates associated with it have risen, tax-free allowances are reducing, and the system is transitioning from assumed returns to taxing actual investment gains.
The mistake here?
Many expats keep accumulating large sums of cash or investments in standard taxable accounts, not realizing that the Dutch taxman will levy an annual wealth tax on those assets.
And this tax burden only grows the more you accumulate.
Our recommendation: Build a strategy around Box 3 that evolves yearly.
One of the best ways we know is using ‘lijfrente’ which is investing through a private pension account that gives a double benefit: it’s tax-exempt in Box 3, and lowers your taxable income in Box 1.
The catch is that these investments are tied up till official retirement age. You can withdraw them before that, but at a penalty.
Still, a pretty good option and one I am personally using myself every year.
Protect yourself and get ahead of taxes
You don't have to be a victim of shifting tax legislation.
Run your numbers ahead of time, model what your personal finances will look like when your tax breaks end, and structure your assets intentionally so you never face a financial shock.
If you’re ready to take this step and need some help and guidance, I'm here for that.
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