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.

30% ruling in the Netherlands is about to be reduced
Is this going to send expats elsewhere?

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’).

Ad

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.

18 COMMENTS

  1. Hello, Is it possible to express our objection and send it to the government. We have it in writing from the tax department that the 30% ruling is valid for 8 years then how can they backtrack on this decision. If the number of people who continue to live in Netherlands for longer than 5 years is only 20% then why don’t they honour their commitment made to us.

    Regards,
    Chirag

    • The NL is benefiting from highly skilled professionals that cannot be found in this country without having paid for their education cost. It is good deal to attract talent and develop the Dutch economy.
      There are 60.000 expats benefiting from the 30% rule and only a fraction buys a house. The market price insanity cannot be blamed on them.

    • Perhaps you could redirect your efforts on the likes of your own Prince Bernard Jr, he seems to own over 349 properties – and that is only counting Amsterdam!

  2. Retrospectively changing a signed agreement on income and tax while you are in the middle of it? Sounds like a great idea…for lawyers! It is almost impossible to comprehend that such ruling will be considered or implemented, after all, those affected have made a significant financial commitment to this country. Besides, 80% of those making use of the ruling leave after 5 years. So why causing this unnecessary stress?

  3. I am worried about changing an existing expats 30% ruling. Expenses like kids schooling fee, rent takes bigger part of salary and the whole family is based on salary. It is going to be hard.

  4. I find this extremely unfair. Rules can not be changed in the middle of the game; I will fight for our rights and I hope I will not be the only one.

  5. This isn’t changing the rules. A tax increase results in paying more tax. It’s just a tax increase. No one wants to pay more tax but this isn’t retrospective. You are not being asked to pay back the benefits of the 30% ruling for for prior years. Expats get an incredibly generous deal and should pay their fair share.

    • We got a decision for eight years… This is breaking a contract! I guess this should be a warning for the future expats wanting to come here: please be aware that this 5 year ruling can be cut to 2 or none without any warning in the future! So stay away from here!

  6. Well it is changing the rules. When the 30% ruling was granted to me, for being a “rare” resource on the Dutch market, for being already schooled and experienced, the decision said that it is granted from 2011 till 2021. And as the evaluation of Dialogic also says, from the 30% ruling is benefited by both the employer and the employee. Most of the 30% ruling holders are programmers, as myself, that in US are paid at least double the salary you get in the Netherlands. The people working here will settle for a smaller brutto salary (than they could get), because they are happy enough with the resulting net salary. Also, it takes a while to get adapted and integrated in the Netherlands. You will keep connections with your family back home, some good friends. It would be nice to not have to worry about the money you’ll have to pay to go home once in a while.
    And of most of the people that came, higher was expected. Even though many times high was the norm.

  7. Like many here, I’m thinking of leaving if this move goes through. I don’t have a problem with changing the period of the 30% ruling for new entrants, they’ll make their own plans appropriately. Without it, I wouldn’t have moved here in the first place, as the high tax regime does make NL an unattractive proposition on paper compared to, well, nearly anywhere else! Now I have lived here for some years, I start to understand the society a bit and appreciate what the high tax ‘buys’ for the people here. The 30% ruling is a tax break to attract talent to a small, expensive nation, reflecting extra territorial costs, etc. All tax rates can change, but what would happen if the government made a ten year tax commitment to all of society, and suddenly put it up by 30%? Exodus?

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.