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Dutch expat tax reprieve causes more confusion
| Published: | 19 Oct at 6 PM |
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Rather than being a solution to the Dutch government’s sudden changes to the 30 per cent expat tax relieve scheme, the recent changes are causing yet more confusion.
Expat professionals attracted to the Netherlands by the government’s 30 per cent of salary tax free deal for eight years were horrified when lawmakers suddenly shortened the tax break’s timescale to five years without ‘grandfathering’ those already in the scheme. The move devastated the financial plans of thousands of expats, with those who’d taken on mortgages especially hard hit. The recently announced changes followed protests from expat groups, employers and industry groups, but seem to have only made matters more confusing.
Jessica Piotrowski, spokesperson for the expatriate group United Expats of the Netherlands, told the media her members aren’t exactly thrilled with the concessions as many will not be able to take advantage of them. She added the government is not honouring the commitment made to every expat who arrived as a result of the original offer. The new proposal, announced October 15, includes a two-year transition period during which some expatriate workers would keep the tax break for as long as they expected, but leaves out many more. Lawyers believe those still excluded may well have grounds for legal action against the government.
According to tax experts, the transition period is likely to benefit around 25,000 workers out of the 65,000 at present on the 30 per cent scheme. However, those who recently became members of the scheme are unlikely to get what they were promised, with employees whose rulings should end in 2021 and 2022 facing a cut-off in 2020. Those whose rulings are due to finish after 2023 will only get a five-year tax break. Lawyers working for the lobby group believe the present offer will be rejected, with the court cases following based on the legality of government cuts to benefits promised to individuals
The Dutch government hasn’t yet published an explanation as to how the transition plan will work, and major as well as smaller companies fear the ongoing confusion will make it more difficult to recruit top talent expats or to persuade those already employed to stay. At worst, the confidence in the Netherlands’s economy felt within the international business community is likely to be damaged, particularly if lawmakers end up in court cases as a result.
The booming tech sector is expected to be hard-hit as their recruitments depend on the 30 per cent tax break to lure top talent from a global pool of IT specialists. Prior to the government’s announcement of changes, Unilever announced it’s withdrawing from its plan to consolidate its Dutch headquarters.
Expat professionals attracted to the Netherlands by the government’s 30 per cent of salary tax free deal for eight years were horrified when lawmakers suddenly shortened the tax break’s timescale to five years without ‘grandfathering’ those already in the scheme. The move devastated the financial plans of thousands of expats, with those who’d taken on mortgages especially hard hit. The recently announced changes followed protests from expat groups, employers and industry groups, but seem to have only made matters more confusing.
Jessica Piotrowski, spokesperson for the expatriate group United Expats of the Netherlands, told the media her members aren’t exactly thrilled with the concessions as many will not be able to take advantage of them. She added the government is not honouring the commitment made to every expat who arrived as a result of the original offer. The new proposal, announced October 15, includes a two-year transition period during which some expatriate workers would keep the tax break for as long as they expected, but leaves out many more. Lawyers believe those still excluded may well have grounds for legal action against the government.
According to tax experts, the transition period is likely to benefit around 25,000 workers out of the 65,000 at present on the 30 per cent scheme. However, those who recently became members of the scheme are unlikely to get what they were promised, with employees whose rulings should end in 2021 and 2022 facing a cut-off in 2020. Those whose rulings are due to finish after 2023 will only get a five-year tax break. Lawyers working for the lobby group believe the present offer will be rejected, with the court cases following based on the legality of government cuts to benefits promised to individuals
The Dutch government hasn’t yet published an explanation as to how the transition plan will work, and major as well as smaller companies fear the ongoing confusion will make it more difficult to recruit top talent expats or to persuade those already employed to stay. At worst, the confidence in the Netherlands’s economy felt within the international business community is likely to be damaged, particularly if lawmakers end up in court cases as a result.
The booming tech sector is expected to be hard-hit as their recruitments depend on the 30 per cent tax break to lure top talent from a global pool of IT specialists. Prior to the government’s announcement of changes, Unilever announced it’s withdrawing from its plan to consolidate its Dutch headquarters.
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