Do expat tax regimes help a US citizen? The 30% ruling cuts Dutch income tax on $150,000 from $49,916 to $25,646, and the IRS sees both numbers

By Skyler Bissell · September 13, 2026 · 11 min read

The 30% ruling cuts a single filer's Dutch income tax on a $150,000 salary from $49,916 to $25,646. A US citizen holding it files two returns, and the second one is built to notice the first: the foreign tax credit is worth exactly what you paid abroad in income tax, so it falls by the $24,270 the ruling saved. Whether that turns into a cheque to the IRS depends on which of the two American tools you file with, and the answer differs for the three regimes on this page.

What each regime removes, and what it leaves: three cities on one salary

One salary throughout: USD 150,000, restated as €129,450 at the build's exchange rate, a single filer with no children and no partner, no retirement deferral, the same person the take-home pay by country ranking prices. The table splits each host bill into the part a US credit can see, which is income tax, and the part it cannot, which is the employee's social contributions. Only the first column moves when a regime switches on.

Engine figures, 2026, in US dollars at the build's exchange rate. Income tax is the national plus regional or municipal income tax after the credits a single filer gets; for Amsterdam it is the income-tax part of box 1 after the general and labour credits, with the national-insurance premiums shown separately because they are social security under the US-Netherlands totalization agreement. Madrid's ordinary line is the state scale plus the Comunidad de Madrid scale; the regime line is the flat 24% on the whole salary. Milan's is IRPEF plus the regional and municipal surcharges, on half the salary under the regime. Amsterdam's premiums fall from $12,406 to the figure shown because the ruling shrinks the base they are charged on; the other two are unchanged.

The effective rates the regimes produce, all-in, are 41.5% to 24.7% in Amsterdam, 39.5% to 27.0% in Madrid and 44.5% to 23.6% in Milan, worth $25,204, $18,803 and $31,247 a year in take-home. Those are the numbers every regime page on this site quotes, and they are right for a German, a Briton or an Indian. For an American they are the top of the calculation.

Everything below is about the third column.

Door one: the foreign tax credit

The credit is a dollar-for-dollar offset of foreign income tax against US income tax on the same income, claimed on Form 1116 and set out in IRS Publication 514, and it has two limits that decide this page. It cannot exceed the foreign income tax you paid, and it cannot exceed the US tax on the foreign income. Below the first limit the credit is worth the host bill; above the second it is worth the US bill and no more, and whatever is left over carries back one year and forward ten.

A regime moves the first limit down. In Milan the impatriati regime takes $31,247 out of the Italian income tax on this salary, and the credit a US citizen can claim falls by the same $31,247. What the IRS then collects is the gap between the reduced host bill and the US tax on the salary, if the US tax is the larger of the two, and zero if it is not. The US side of that subtraction is a federal bill that depends on filing status, state, deductions and which tool you file with, so I have not computed it here; our page on the FEIE against the foreign tax credit prints it for a single filer on the same salary and puts it at about a sixth of gross. Hold that against the three regime columns and the shape is clear.

• Madrid. Beckham's flat 24% leaves $36,000 of Spanish income tax on the salary, 24.0% of gross. That is still more than the US federal bill on the same salary for a single filer, so the credit covers the US charge in full and the whole $18,803 saving is yours. The regime shrinks the surplus credit you would have carried forward, which costs nothing unless a later year needed it.
• Amsterdam. The ruling leaves $25,646, 17.1% of gross, which sits close to the US federal charge on this salary. At the margin the credit covers it; a filer in a sticky state, or one with a larger salary, tips over the line and owes the difference to the IRS, dollar for dollar out of the ruling's saving.
• Milan. The impatriati regime leaves $22,719, 15.1% of gross, below the US federal charge. Under the credit alone, the IRS collects the gap, and a part of the $31,247 Italy gave up arrives in Washington instead of staying with you. How large a part is the subtraction above, on your own return.

Two things sit outside the credit on every row. The contributions column is invisible to Form 1116, because social security taxes paid to a country with a totalization agreement are not creditable, and the agreement decides which country's system you pay into in the first place. And the credit is a general-category pool, so someone who arrived from a high-tax country with unused credits from earlier years can absorb a regime-year shortfall with them; someone who arrived from the United States has none.

Door two: the exclusion

The foreign earned income exclusion removes the first USD 132,900 of 2026 salary earned abroad from US taxable income, on Form 2555, provided you pass the 330-day or bona fide residence test. It does not look at the host bill. A salary taxed at the Beckham flat rate, at the reduced Dutch base or at nothing at all is excluded on the same terms.

For the person on this page that cap is €114,693 of a €129,450 salary, so under the exclusion the regime's saving on almost nine tenths of the income is untouched by the US return. The remaining slice is taxed at the rate it would have met with the excluded income still underneath it, the stacking rule, and the host income tax on that slice can still be credited. The ruling's own floor helps here: the salary norm works out at €68,590 of gross, below the exclusion cap, so a ruling holder earning between the floor and the cap has the whole salary excluded and the whole Dutch saving kept. The 30% allowance itself is salary to the IRS, which defines foreign earned income by where the work is done and taxes a citizen's worldwide income, so the exclusion is applied to the full €129,450 and the Dutch return to 70% of it.

The exclusion has costs that are not on the tax return, and they matter more under a regime because the regime makes the exclusion the better tool. A filer who excludes salary cannot claim the refundable part of the Child Tax Credit, a rule that only bites when the federal bill is small, which the exclusion makes it; the two designs are compared in does the US have child benefit. Excluded income is not compensation for IRA purposes, so a fully excluded salary leaves no IRA room that year, worked through in what happens to a 401(k) abroad. And foreign tax paid on excluded income is neither creditable nor deductible, which under a regime is a small number and after the regime ends is a large one.

The five-year clock

Three clocks run at once. The ruling lasts five years from the start date. The impatriati regime lasts five tax periods and Beckham six. And the exclusion, once you have elected it and then revoked it, cannot be elected again for the next five tax years without the IRS's consent. Put the three together and the order of your filings matters more than the choice itself.

1. Arriving from the United States. Elect the exclusion in the first regime year and keep it for the regime's life. The host bill is low, the credit would be small, and the exclusion protects the saving on the first USD 132,900 regardless. Credit the host tax on any slice above the cap.
2. When the regime ends. The host income tax jumps, in Amsterdam from $25,646 back to $49,916 on this salary, the expiry cliff quantified in when the 30% ruling ends. Now the credit is the better tool, because the host bill exceeds the US one with room to spare and the surplus carries forward. Revoking the exclusion at that point is allowed, and the five-year bar that follows costs nothing as long as you stay in a high-tax country.
3. The order that hurts. Someone who was already abroad on the credit, having revoked the exclusion within the last five years, cannot switch to the exclusion for a new regime without asking the IRS. Their regime years run on the credit alone, and the shortfall in the Milan row above is theirs to pay. The same trap catches a second move: Berlin on the credit, then Milan under the regime, inside one five-year window.

Filing order is the one lever in all of this that you hold.

None of this changes the host side. The Belastingdienst, the Agencia Tributaria and the Agenzia delle Entrate grant and withdraw their regimes on their own conditions, priced in expat tax breaks, decoded; the US return is a second filter the saving passes through afterwards.

Two catches that come with the passport

The Netherlands. Until the 2024 tax year a ruling holder could elect partial non-resident taxpayer status, which took box 2 and box 3 income out of Dutch tax, and under the Belastingdienst's guidance of the time a US national who made the election was treated as a non-resident for box 1 income earned outside the Netherlands as well, so working days in the United States fell outside the Dutch net. That was the one regime perk written for one passport. The Belastingdienst now states that from the 2025 return the election is gone, with transitional use up to the 2026 return for people who were on the scheme before 2024, and its pages no longer describe the American treatment at all. An American arriving now gets the 30% allowance on the same terms as everyone else and nothing extra for the passport.

Spain. A Beckham taxpayer is taxed under the non-resident rules, and the regulation grants a certificate of residence for a tax treaty only where the ministry has designated the treaty on a reciprocity basis, so a Beckham taxpayer cannot count on one under the US-Spain treaty. For most nationalities that is the regime's hidden cost. For a US citizen it changes less than it sounds, because every US treaty carries a saving clause under which the United States taxes its citizens as if the treaty did not exist, with a short list of exceptions; the treaty was never going to shelter the salary from the IRS, and the credit and the exclusion are domestic law that work with or without it. The regime's own rules are in the Beckham Law explained.

What this page leaves out

• The US bill itself. Every figure above is the host side. The federal charge on this salary depends on filing status, deductions and the tool, and the state charge on whether you left a sticky state, which is mapped in do expats pay state taxes. Neither is computed here.
• Equity. RSUs vesting during regime years are taxed by the host under regime rules and by the United States in full; the Dutch and Spanish treatment is its own subject.
• The net investment income tax and box 3, which the exclusion does not touch and the credit reaches only in part.

This is general information about how the mechanisms fit together and it is not tax advice; a US citizen under any of the three regimes should run the two returns with someone who files both.

FAQ

The regimes themselves, every relief and honest-note regime in Europe priced on one salary, are in expat tax breaks, decoded. The New York to Amsterdam comparison shows the ruling inside a whole budget, with a toggle for it. Run your own salary through the calculator with the regime switched on, then take the host figure it prints to whoever files your US return.

Sources. The credit and its limits: IRS, Foreign tax credit and Publication 514 (the limitation, the one-year carryback and ten-year carryforward, no credit on excluded income, and "no deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement"), retrieved 13 September 2026. The exclusion: IRS, Foreign earned income exclusion; the 2026 cap of USD 132,900 from Rev. Proc. 2025-32; the five-year bar from IRS, Revoking your choice to exclude foreign earned income and Publication 54. The saving clause: IRS, Tax treaties can affect your income tax. The ruling and the end of partial non-resident status: Belastingdienst, the Expat Scheme (30% facility). Beckham: Article 93 of Ley 35/2006 and Article 120 of the Reglamento (RD 439/2007) on the residence certificate, and the Agencia Tributaria, Manual práctico de Renta 2025. Impatriati: Article 5 of Decreto Legislativo 209/2023 via the Agenzia delle Entrate. Totalization agreements with the Netherlands, Spain and Italy: the Social Security Administration's overview, and the agreements' own texts (Tractatenblad via wetten.overheid.nl, BOE-A-1988-8177, Legge 86/1975). Every host-side value carries its own source and date in data/_meta.json, per the methodology.

Figures here come from cityparity's per-city engine and were current at publication; regime rules, US thresholds and exchange rates move, so treat any single number as a strong estimate and run your own inputs. Where our comparison pages quote an equivalent salary, it is the bar an offer has to clear in the destination city and it is not a job offer. See the methodology.