Considering moving to the Netherlands as a skilled expat? Things are about to change for you. The House of Representatives has voted to eventually scrap the 30% ruling for expats.
The 30% ruling is meant to offer an incentive for skilled expats to move to the Netherlands. It’s a tax credit scheme that means 30% of an expat’s salary is not taxed for the first five years of their stay in the Netherlands.
However, last night, the House of Representatives voted to phase out the favourable ruling, NOS reports.
New expat tax credit scheme
As of January 2024, the 30% ruling as we know it will be no more.
Instead, the tax credit will be slowly phased out for highly-skilled expats entering the country — although current ones in the NL will not be affected.
It will be replaced by the following scheme:
- For 20 months, a highly-skilled expat won’t have to pay tax on 30% of their salary.
- For 20 months after that, they won’t have to pay tax on 20% of their salary.
- For 20 months after that, they won’t have to pay tax on 10% of their salary.
This is all part of Peter Omtzigt’s plan (dubbed the Omtzigt amendment).
Why are they doing this?
The Dutch government has chosen to do this in order to reduce interest on Dutch student loans.
Members of the “unfortunate generation” who had to take out loans to study were also expected to be saddled with interest on their loans. This has been met with plenty of backlash.
In order to reduce this interest, the Dutch government has to get money from elsewhere — the solution? Get rid of the 30% ruling.
READ MORE | Do the royals pay taxes in the Netherlands?
The new proposal from Peter Omtzigt, GroenLinks/PvdA, Volt and the Christian Union is expected to bring in an extra €200 million by the year 2029. 😮
The House of Representatives hasn’t announced just how much the interest rate will be reduced on student loans.
It’s also worth noting that while the House of Representatives has voted in favour of this change, it must still pass through the Senate.
Do you agree or disagree with this new plan? Share your thoughts in the comments below!
How does the transition period work out for those already with the tax exemption ?
the tax credit will be slowly phased out for highly-skilled expats entering the country — although current ones in the NL will not be affected.
Literally as written above
One of the big incentive for tech worker to come to the NL is the 30% ruling. In an industry that struggles to recruit as it is, this measure along with switching courses in uni to Dutch will practically kill the Dutch tech industry and research. And with it the edge that Dutch economy has over other EU countries.
This is nothing but short sighted policy making. That I would say it’s driven by ideology than reason but it is actually just a move before elections.
When will the Senate vote on the proposed changes to the 30% ruling and other related provisions for Expat workers and businesses?