Good news for many expats that felt cheated by the Dutch government since their 30% tax ruling was about to be shortened from 8 to 5 years on the 1st of January 2019: it looks like this will be postponed for 2 years! Effectively establishing this very wanted transition period for people that are now in their 3rd of 4th year.
Tell me more about the 30% Expat-ruling DutchReview!
The government is focusing on lower personnel costs for employers. That is why the so-called expat arrangement is extended by two years. Companies can thus continue to pay foreign employees up to 30 percent of their salary tax-free.
Previously, State Secretary Snel (of the Ministry of Finance) wanted to reduce the duration of this nice little tax scheme from eight years back to five years, screwing up all those expats who just bought a house or something on the presumption that their tax-benefit was going to last for a few more years. That piece of austerity is now being postponed for two years, so huzzah! There’s even gossip in political The Hague that the 30% will be left untouched after further negotiations have taken place between the involved governmental parties.
An estimated 65,000 expats use the tax benefit. It costs the Dutch Treasury about 900 million to 1 billion euros every year.
Dividend tax will stay, and so will the 30% expat tax ruling
The Cabinet wants to reduce the financial burden on businesses as well. These plans replace the controversial abolition of the dividend tax. Prime Minister Rutte announced today ‘that measure is now definitely out of the question’.
The Hague sources say that the corporation tax paid by large companies on their profits is reduced from 22.5 to 20.5 percent. For small and medium-sized businesses, this tax ranges from 16 to 15 percent.
What do you think about the shortening of the 30% ruling in the Netherlands being postponed? Will you be affected? Let us know in the comments! Also, don’t forget to join our Facebook group for more.