Moving to the Netherlands to work or start a company, or leaving again partway through the year, brings you face to face with two things that sound related but really aren't: the 30% ruling and the M-form tax return. One is a tax benefit that only some people qualify for, the other is a filing requirement that applies to almost anyone who relocates. Here's the difference, the 2026 numbers, and what both actually mean once you're running your own business rather than working for someone else.
The 30% ruling and the M-form, at a glance
| 30% ruling | M-form return | |
|---|---|---|
| What it is | A tax-free allowance of up to 30% of your salary | A mandatory income tax return for the year you moved |
| Who it's for | Employees (and, under conditions, director-shareholders) with specific expertise | Anyone who lived in the Netherlands for only part of the year |
| Applies to self-employment profit? | No, only to salary from an employer | Yes, including profit from your own business |
| Duration / deadline | Maximum 5 years | Before 1 July of the year after you moved |
What the 30% ruling actually covers
The 30% ruling, officially the "expatregeling," lets an employer pay part of an incoming employee's salary tax-free, as compensation for the extra cost of working abroad, things like a higher rent or the cost of relocating. To qualify, you need specific expertise that's scarce on the Dutch labor market, and your employer needs a formal ruling from the tax authorities before it applies.
For 2026, the numbers look like this:
- Salary threshold: your taxable annual salary needs to be at least €48,013 (excluding the allowance itself).
- Reduced threshold: under 30 with a Dutch master's degree or an equivalent foreign one, the threshold drops to €36,497.
- Maximum tax-free allowance: €78,600 a year, tied to the public-sector pay cap.
- Duration: a maximum of 5 years, and time you already spent living or working in the Netherlands before can shorten that.
From 2027 the scheme gets scaled back: the percentage drops to 27% and the salary thresholds rise. Whichever year you apply in sets your terms, so check the current figures on the Belastingdienst website before submitting anything.
Does it work if you're self-employed or run your own BV?
This is where a lot of expat founders get tripped up: the 30% ruling only applies to salary from an employment relationship. Run a sole proprietorship and invoice clients directly, and there's no employer paying you a salary, so there's nothing for the ruling to apply to. Profit from your own business simply doesn't qualify, no matter how well you'd otherwise fit the "scarce specialist" profile.
Set up your own BV and pay yourself a director's salary instead, and the picture changes. As a director-shareholder you count as an employee of your own company, so if you meet the expertise requirement, qualify as an "incoming employee," and get a ruling from the tax authorities, the 30% allowance can apply to that salary. That salary still has to meet the separate "gebruikelijk loon" (customary salary) rule for directors, our customary salary check shows what figure applies to your situation and how much room that leaves for the 30% allowance.
Still weighing a sole proprietorship against a BV, with this benefit in mind? Run the BV or sole proprietorship check first, since that choice is what decides whether the 30% ruling is even on the table for you.
When do you need to file an M-form?
Separately from the 30% ruling, almost anyone who moves to or from the Netherlands partway through the year has to file an M-form tax return, sometimes called an M-biljet. It's required whenever you were a Dutch tax resident for only part of the calendar year, whether you're employed, self-employed, or a director-shareholder.
The M-form is due before 1 July of the year after you moved, later than the usual 1 May deadline that applies to a full calendar year. Recent tax years can be filed online through Mijn Belastingdienst; older years still require the paper form. If you're self-employed, a paper M-form also needs a separate profit statement for your business, which takes more preparation than a standard return, one more reason to start early instead of scrambling near the deadline.
A worked example
Say Sara moves from Canada to Amsterdam in September to run her own consultancy through her BV. She meets the expertise requirement and gets a ruling for the 30% scheme. Her director's salary is €70,000 a year, comfortably above the €48,013 threshold and well under the €78,600 cap the allowance is calculated against. That means up to 30% of that salary, €21,000, can be paid to her tax-free.
Because Sara only lived in the Netherlands from September, she was a resident for four months of the year. On top of her regular company filings, she still needs to submit an M-form for the year she moved, before 1 July of the following year, regardless of whether the 30% ruling applies to her salary.
Frequently asked questions
Can I apply for the 30% ruling after my employment has already started? Yes, you have up to four months from the start of your employment to apply without losing the benefit for those months. Apply later, and it only kicks in from the month after you submit the request.
Do I need to file an M-form if I lived in the Netherlands all year but worked abroad for part of it? No, the M-form is about where you were a tax resident, not where you worked. If you were a resident all year, you file a regular return, even if some of your income came from abroad.
If I move again within five years, does the 30% ruling keep going? It ends as soon as your employment ends or you stop meeting the conditions, even if the five-year maximum hasn't run out. Switch employers, and you need a new ruling from scratch.
New to the Netherlands? We're here before the paperwork even starts
At Sophy &Co. we support expat founders from the very first questions, long before anything is officially filed. Book a call and we'll talk through what starting and running a company in the Netherlands really involves, in plain English.
Our team is woman-led and genuinely diverse, women and men both, and proudly LGBTQIA-friendly. Between us we cover English, Dutch, Italian, Chinese, Spanish, Papiamento, German, and some French and Polish, so you can explain your situation in the language you're most comfortable in.
Want to know more?
Check our services and pricing, or read how it works. Setting up your own company here? See registering with the KVK as a sole trader (Dutch) for the practical steps, or what a bookkeeper actually does in the Netherlands for a broader picture. For the official rules, see the Belastingdienst on the 30% ruling and the Belastingdienst on the M-form.