2025 Tax and Legal Changes in the Netherlands: What Expats Need to Know

Tax Reforms in 2025

Income Tax Adjustments

The Dutch government has made some tweaks to the progressive tax system this year, aiming to reduce the financial burden on middle-income earners while collecting more from high-income brackets.

• Lower tax rate for incomes up to €75,000, reduced to 36.8% (down from 37.05%).

• Higher tax rate for earnings above €75,000, now 49.75%.

• Increased tax-free allowance for lower-income households, making it slightly easier for families to manage costs.

These changes aim to balance affordability with sustainability, ensuring that the Dutch welfare state remains strong.

30% Ruling for Expats: Stricter Rules

The 30% tax ruling—a popular incentive for highly skilled expats—has undergone some changes:

• Duration reduced from five years to four years.

• Minimum salary requirement raised to €45,000 per year (previously €41,954 in 2024).

• Stricter screening on specialist knowledge, meaning fewer people will qualify.

If you’re already under the 30% ruling, you can still benefit under the old terms until your period expires. However, new expats should be aware of the stricter entry requirements.

VAT Adjustments

• The standard VAT rate remains at 21%, but certain leisure and wellness services are no longer eligible for the reduced 9% VAT rate.

• Online service providers now face tighter VAT compliance rules, affecting freelancers and digital entrepreneurs.

Employment and Work Visa Changes

New Rules for Highly Skilled Migrants (HSM) Visa

For those seeking work under the Highly Skilled Migrant (HSM) scheme, 2025 brings some noteworthy updates:

• Minimum salary thresholds increase:

  • Under 30 years old: €3,750 per month (up from €3,672).

  • Over 30 years old: €5,000 per month (up from €4,981).

• Employers now need to demonstrate a long-term employment plan, making sponsorship applications more rigorous.

Freelancers and Gig Workers: Stricter Rules

• Uber, Deliveroo, and other platform workers now have guaranteed minimum wages and social benefits.

• Employers must offer fixed-hour contracts after a set period, preventing precarious working conditions.

• The self-employment deduction (Zelfstandigenaftrek) is being further reduced, affecting net earnings.(plus mandatory pension contributions might soon be required for ZZP workers)

For digital nomads and self-employed expats, these changes could mean extra paperwork but also better protection under Dutch labor laws.

Education and Childcare in 2025

Free Childcare for Working Parents

Good news for parents! The Dutch government is rolling out nearly free childcare for working families.

• The state will cover up to 96% of daycare costs for children attending KDV (daycare) and BSO (after-school care).

• The reform encourages dual-income households by reducing financial barriers to professional childcare.

More Funding for Public Schools

• Increased budgets for bilingual education and Dutch as a second language (NT2) programs to help expat children integrate more smoothly.

• More grants and subsidies for international students studying in Dutch universities.

• Stricter entry requirements for non-EU students, including proof of higher financial resources.

State Benefits and Residency Rules

Changes to Unemployment Benefits (WW)

• The eligibility period for short-term workers is reduced.

• Unemployed individuals must show active job-seeking efforts to continue receiving benefits.

Permanent Residency and Citizenship Updates

• The Dutch integration exam is still A2-level but expected to be increased to B1-level Dutch instead of A2-level proficiency by 2026.

• The five-year residency requirement remains, but stricter checks on continuous residence will be enforced.

• More emphasis on financial independence, making it harder for expats without stable income to qualify.

These changes mean that those planning to settle in the Netherlands long-term should start preparing early for language and financial stability requirements.

Final Thoughts

2025 is a year of mixed news for expats in the Netherlands. While tax adjustments and childcare benefits provide some relief, visa restrictions and stricter permanent residency rules could pose new challenges. Whether you’re an expat professional, a student, or a family moving to the Netherlands, staying informed is key to navigating these changes smoothly.

For more updates on Dutch policies and expat life, keep on following NetherGuides.com!