Tax Allowance for Inpatriates: Netherlands, France, Spain, Belgium

A tax allowance for inpatriates in Europe is a country-specific tax break that shields part of a foreign-recruited professional’s salary or income from ordinary tax, in recognition of the extra costs of relocating for work. The Netherlands, France, Spain, Belgium, and Portugal each run their own version, and the rules on percentages, salary thresholds, and duration differ enough that the same worker can face very different net pay depending on where the job sits.

The Common Mechanism Behind These Regimes

A foreign professional recruited from abroad carries costs a local hire does not: housing in an unfamiliar market, language training, international schooling, flights home, and the general expense of maintaining ties to two countries. Rather than asking the employer to document and reimburse each item, these regimes let a flat percentage of gross salary pass through tax-free as a lump-sum reimbursement for those “extraterritorial” costs, or apply a reduced rate to the worker’s income entirely.

The employer adjusts payroll so only the remaining portion of salary faces standard income tax. The worker’s net pay rises without the employer spending an extra euro on compensation. Governments accept the forgone revenue as the price of attracting specialized workers and the corporate activity that follows them.

The Netherlands: The 30% Ruling

The Dutch Expat Scheme, commonly called the 30% ruling, is governed by the Wages Tax Act 1964 and is the most widely used inpatriate regime in Europe. Until the end of 2023, qualifying workers received the full 30% tax-free allowance for five straight years. From January 1, 2024, the benefit steps down over the same five-year window:

Months 1–20: 30% of salary is tax-free
Months 21–40: 20% of salary is tax-free
Months 41–60: 10% of salary is tax-free

Workers who already held the ruling before 2024 sit under transitional provisions and can still use the partial non-resident taxpayer option through their 2026 tax return.¹

Who Qualifies

Two gates control eligibility: a salary floor and a distance-from-the-border test. For 2026, the minimum annual taxable salary is €48,013. Workers under 30 who hold a Master’s degree from a qualifying institution face a lower threshold of €36,497.² These figures are indexed each year, so verify the current numbers before applying.

The Tax Administration also weighs whether the worker brings “specific expertise” that is scarce in the Dutch labor market, judged by education, professional experience, and domestic availability of the skill set. Academic researchers and physicians in specialist training follow separate rules and may qualify without meeting the salary threshold.

On geography, the worker must have lived more than 150 kilometers in a straight line from the Dutch border for at least 16 of the 24 months before their first working day in the Netherlands.² The rule keeps residents of Belgian, German, and Luxembourg border regions out of a benefit meant for genuinely international recruits. Rental agreements, residential records, and utility bills from the previous country typically prove the distance.

Duration and Prior Dutch Stays

The ruling runs for a maximum of 60 months. The decision letter states the exact start and end dates. Any earlier period the worker spent living or working in the Netherlands is subtracted from that window, so a year of prior study in Amsterdam leaves four years of eligibility.²

Some prior stays do not count. Time in the Netherlands that ended more than 25 years before the current employment start date is disregarded. Brief work visits totaling fewer than 20 days per year, or personal stays for holidays and family visits totaling fewer than six weeks per year (or a one-off period of three consecutive months), also do not reduce the five-year maximum.²

Changing Employers

The ruling can transfer to a new Dutch employer if the worker continues to meet the eligibility conditions and signs the new employment contract within three months of leaving the previous job. Miss that three-month gap and the ruling is gone for the remainder of the term. There is no reinstatement.

The Partial Non-Resident Election

A worker who holds the Expat Scheme and lives in the Netherlands may elect to be treated as a non-resident taxpayer for certain categories of Dutch income tax: taxable income from substantial interests (Box 2) and taxable income from savings and investments (Box 3). The practical effect is a lower taxable base for foreign-held portfolios, since non-residents are generally only taxed on Dutch-source income in those categories.² The election is made annually on the tax return, not automatically.

Applying

The employer files the application. The deadline that matters is four months from the worker’s first day of employment. File within that window and the ruling applies retroactively to the start date. File later and the benefit begins only on the first day of the month after the Tax Administration receives the request, with the months in between lost.

The package needs the signed employment contract with an addendum converting part of the gross salary into the tax-free allowance, proof of prior residence outside the 150-kilometer zone, copies of relevant diplomas, and the worker’s Citizen Service Number (BSN) or tax identification number. The Tax Administration typically decides within eight weeks of receiving a complete file.³ Without the contract addendum, the ruling can be denied or revoked at audit.

France: The Inpatriate Regime

France’s regime applies to workers who were tax resident outside France for at least five calendar years before being recruited by a French company. It covers both intra-group transfers and direct hires from abroad. Workers already living in France at the time of recruitment are excluded.⁴

There are two calculation paths. A worker can document and exclude the actual expatriation bonus tied to working in France, or opt for a flat-rate assessment capping the exempt portion at 30% of total compensation. On top of that, half of qualifying foreign-source investment income, intellectual property royalties, and capital gains on foreign securities are also exempt. The regime runs until December 31 of the eighth calendar year following the start of duties.⁴

Spain: The Beckham Law

Spain takes a different approach. Rather than exempting a slice of salary, the Beckham Law lets qualifying inpatriates pay Non-Resident Income Tax rates while remaining Spanish tax residents in a technical sense. Withholding on employment income is a flat 24% on earnings up to €600,000, and 47% on anything above. The regime lasts for the year of arrival plus the following five tax years.⁵

To qualify, the worker must not have been a Spanish tax resident during the five tax years before the move. The move must stem from a new employment contract, an appointment as a company director, an entrepreneurial activity, or highly qualified professional work for a startup. Since 2023, the door has opened wider to entrepreneurs and researchers, not just traditional employees.⁵

Belgium: Two Tracks Since 2022

Belgium reformed its inpatriate regime in 2022 into two tracks. The general track for inbound taxpayers requires gross salary above €75,000, a figure set to drop to €70,000. A second track for inbound researchers has no salary floor but requires a relevant research diploma.

Under both tracks, employers can grant a tax-free lump-sum allowance of up to 30% of gross salary, currently capped at €90,000 per year. Proposed reforms would raise the percentage to 35% and remove the annual cap. Employers must file the application within three months of the worker’s start date.

Portugal: Research and Innovation Only

Portugal phased out its Non-Habitual Resident (NHR) regime and replaced it with a narrower incentive aimed at scientific research and innovation. Workers in qualifying academic, research, or knowledge-transmission roles who have not been Portuguese tax residents in the previous five years pay a flat 20% income tax rate for ten years. The scope is much tighter than the old NHR, which reached a wide range of high-value professions.

Social Security Sits Outside These Regimes

A tax allowance reduces income tax; social security contributions are a separate matter. Within the European Union, coordination regulations generally keep a worker in one member state’s system at a time, usually the country where the work is performed, and employers arrange an A1 certificate to confirm which country’s rules apply. Workers moving between countries with a bilateral social security agreement follow a similar process using a certificate of coverage from the home country. Workers from countries without any such agreement can end up paying into two systems at once, so this is worth resolving before the assignment begins.

1
Government of the Netherlands. 30% Facility for Highly Educated Foreign Employees (Expats)
2
Tax Administration. Can I Apply for the Expat Scheme (30% Facility)?
3
Business.gov.nl. The Expat Scheme for Foreign Employees in the Netherlands
4
Impots.gouv.fr. The Expatriate Tax Regime
5
Agencia Tributaria. Special Regime for Expatriates Art. 93 Personal Income Tax Law