Expat regimes: Belgium relaxes, the Netherlands tightens

This article was originally published in the trade journal Grensoverschrijdend Werken.

Belgium and the Netherlands are moving their expat regimes in opposite directions. As from 2025, Belgium has increased the tax-free lump-sum allowance to 35%, abolished the cap and lowered the salary threshold for the BBIB (special tax regime for inbound taxpayers) to EUR 70,000. The Netherlands, by contrast, is restricting its regime. It has capped the regime by reference to the WNT (Senior Officials in the Public and Semi-Public Sector (Standard Remuneration) Act), abolished the partial non-resident tax status, and will reduce the percentage to 27% as from 2027. These differences are more than technical tax amendments. They affect net pay, salary negotiations and the attractiveness of an international remuneration package. What matters is not only the percentages but also the conditions, salary thresholds, caps and transitional arrangements. In this article, we compare the recent changes to both regimes and explain their consequences for employers and employees.

Belgium lowers the entry threshold

The Belgian special tax regime for inbound taxpayers (BBIB) applies to employees and certain company directors who are recruited from abroad or who come to Belgium within an international group. The special tax regime for inbound researchers (BBIO) applies only to employees who mainly carry out research activities and who meet the degree or experience requirements.

Both Belgian regimes have a 60-month look-back period. During that period, the person concerned must not have been a Belgian resident, must not have lived within 150 kilometres of the Belgian border, and must not have been subject to Belgian non-resident tax on professional income. Since 2025, the annual gross remuneration under the BBIB must amount to at least EUR 70,000. The BBIO has no salary threshold, although it is advisable to always bear in mind any minimum wage or immigration requirements.

The Netherlands has a single 30% ruling for incoming employees with specific expertise. For more than 16 of the 24 months preceding the first working day, the employee must have lived more than 150 kilometres from the Dutch border. In 2026, the employee’s taxable salary must exceed EUR 48,013 on an annual basis. For employees under the age of 30 with a qualifying master’s degree, the threshold is EUR 36,497. No salary standard applies to certain researchers, academic teaching staff and doctors in training.

Because of its lower salary threshold, the Dutch regime may be available to a broader group of employees.

Belgium broadens, the Netherlands restricts

As from 2025, Belgium has clearly opted for a more generous regime. If contractually agreed, the employer may grant up to 35% of the gross remuneration as a tax-free reimbursement of costs proper to the employer. This reimbursement covers recurring expenses that arise directly from the employment or secondment in Belgium. It must be agreed in the employment contract and, for tax purposes, granted on top of the taxable gross remuneration. At the same time, the minimum salary threshold for the BBIB was lowered from EUR 75,000 to EUR 70,000, and the former annual cap of EUR 90,000 on the cost reimbursement was abolished.

The Netherlands is taking the opposite approach:

• As from 2019, the maximum term of the ruling was reduced from 8 to 5 years.
• As from 2024, a maximum of 30% of the salary, including the allowance, may still be paid tax-free, but the ruling is capped at the WNT standard of EUR 262,000. Where the ruling applies for a full year, the maximum tax-free allowance therefore amounts to EUR 78,600.
• Since 2025, the partial non-resident tax status has been abolished, subject to temporary transitional rules.
• As from 2027, the lump-sum allowance will in principle decrease to 27%, and higher salary standards will apply to new cases. Transitional rules apply.

The Netherlands is thus gradually making the ruling less generous. Cautiously put, this reflects a broader trend in the Netherlands towards limiting the tax generosity of the ruling and introducing budgetary and policy-driven tightening.

The contrast is also relevant in practice. Belgium’s relaxation increases the importance of the special regime when structuring the remuneration package. The Dutch tightening mainly calls for attention to the cap, the applicable transitional rules and the annual salary check. In the Netherlands, the employer and employee must also choose each calendar year between the lump-sum allowance and reimbursement of the actual extraterritorial costs incurred.

For the time being, the Belgian relaxations apply for tax purposes only. For social security purposes, the National Social Security Office (RSZ/ONSS) continues to apply the tax parameters as they stood on 1 January 2022. Those parameters are a maximum of 30%, an annual cap of EUR 90,000 and the then-applicable salary threshold of EUR 75,000.

Worked example

The example below illustrates the diverging policy directions in concrete terms. It assumes a single employee below the statutory retirement age, with no children and no other benefits, and an annual gross salary budget of EUR 100,000 for the employee, excluding employer contributions.

For illustrative purposes, the Dutch 27% ruling applicable as from 2027 has been applied to the 2026 income tax rates.

When the expat regimes are applied, the employer cost in this example is broadly similar: EUR 118,519 in Belgium compared with EUR 117,140 in the Netherlands. Against this limited cost difference stands a considerable difference in net pay. The employee takes home EUR 77,514 in the Netherlands, compared with EUR 68,112 in Belgium. Based on the assumptions used, the Netherlands therefore comes out as the more financially advantageous option.

Practical impact and recommendations

Belgium is broadening its expat regime, while the Netherlands is scaling its ruling back. Possible application of these regimes should therefore always be assessed during salary negotiations and when evaluating the salary structure. A prior simulation can give employer and employee insight into the total employment cost and the expected net pay. It is important to look beyond the short-term benefit and also consider future changes to the percentage, expected salary increases, the cap and the transitional rules. This allows an expat package to be better aligned with the full term of the employment.

The remuneration structure and conditions should then be clearly laid down in the employment contract. The applicable percentage, the cap and the transitional rules should also be monitored every year. Finally, make sure the application is filed within the statutory deadline.

Annex: the regimes at a glance