Bad news for expats: the 30% ruling in the Netherlands is about to be reduced
Today we bring you some totally crappy news about the 30% ruling. If you’re currently using this, then you need to read on as it’s likely going to affect you.
The Dutch government has decided to decrease the maximum time you can have the 30% ruling, from 1st January 2019. This means instead of the 8 years of the 30% ruling, you will only receive 5 years (this is almost half the time)! Usually, this would mean that people already using the 30% ruling are exempt. However, unfortunately that is not the case. If you are approaching your 5th year, or are past 5 years, the 30% ruling will stop. This goes for anyone who has started or is starting the 30% ruling of their taxes.
Understandably people aren’t happy about it and employers think it’s going to make it harder to attract these much-needed skills from abroad.
What is the 30% ruling in the Netherlands exactly?
The 30% is basically a scheme that allows expats to receive up to 30% of their income tax completely tax-free. The purpose is to attract expats with certain skills to the country, as the Netherlands always has a use for skilled people in their workforce. This is also to help with the costs of living for these new expats.
When you think about the costs of living in the Netherlands:
To be eligible, you must be either: transferred to the Netherlands to work, or hired from abroad. You then have to have a specific set of skills which are in short supply within the Netherlands. HOWEVER, research (by the Ministry of Finance), has shown that 80% of these expats only use the 30% ruling scheme for less than 5 years anyway. So this is likely what made the government come to this conclusion (and you know, their policy of ‘sticking it to you’).
What do you think about the 30% ruling in the Netherlands being reduced from 8 to 5 year? Will you be affected? Let us know in the comments! Also don’t forget to join our Facebook group for more.