Planning on having a kid in the Netherlands? Well, you’d better hurry it up and pop one out quickly – because from January 2025, it’s going to cost you €30,000 more.
The abolition of the income-related combination tax credit (IACK) on December 31, 2024, will result in new parents losing the equivalent of €30,000 in tax benefits from January 2025 onwards, reports AD.
READ MORE | 8 things to know about having a child in the Netherlands
Say goodbye to your little friend…
New Year’s Day in 2025 is going to be a painful one for family wallets, as the abolition of IACK will come into place on January 1.
The IACK was established for parents working and living in the Netherlands who were caring for a child under 12.
This means that parents pay less in income tax and national insurance contributions, with the most credit being attributed to parents with the lowest income.
Now, an agreement within the coalition government in the Netherlands has decided that this tax credit will be cut.
Why? Because the Dutch cabinet plans to make childcare costs so cheap, to the point that it is almost free. This would make the IACK irrelevant.
However, the abolition of this tax credit happens quite literally overnight. Any parent living in the Netherlands whose child is born before December 31, 2024, will still receive the almost €30,000 credit.
But, a child born a minute past twelve will no longer be eligible for that. 🤔
Even the Dutch cabinet is surprised
The abruptness, and seeming unfairness, of this sudden changeover and loss of tax credit, is surprising, even to Members of Parliament.
Dutch MP Henk Nijboer says to AD, “This creates huge differences between parents. This makes absolutely no sense whatsoever.”
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State Secretary Marnix van Rij says, “as a cabinet, we adhere to the coalition agreement.” So, even though parents of children born in 2025 will miss out on this rather significant tax cut, the government intends to keep the strict cut-off as it is.
Plus, if the government were to slowly phase back on the IACK, it would cost them a grand sum of €1.7 billion per year, which isn’t exactly nickels and dimes.
What do you think of the sudden change? Tell us your thoughts in a comment below! 👇