Expats in Netherlands devastated by cutdown in 30 per cent ruling

Published:  25 Apr at 6 PM
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Whilst admitting changing the time period on the 30 per cent tax cut for newly arrived expat professionals could be justifiable, long-term expats in the Netherlands are devastated by the prospect of losing out.

Yesterday’s announcement of the reduction in the 30 per cent tax benefit from eight years to five came as a shock to the country’s highly-skilled expat community, many of whom have based their long-term financial arrangements on the original term. The measure will be introduced as early as January next year, giving those affected just eight months to rearrange their lifestyle around what is, in reality, a 19 per cent but in salary. Put in basic terminology, those who’ve planned their finances on an eight-year basis are, quite simply, screwed.

Online comments tell it all, with one expat and his partner arriving in the Netherlands four years ago, buying a property and having a child last year, all in the expectation of the tax-free allowance staying put until 2022. Another expat couple have a mortgage and are expecting their first child, with their careful financial planning based on the tax break. All those affected were given documentation from the tax authorities and the government including dates, requirements and assurances the 30 percent ruling was valid for eight years. Now, it seems, the government has reneged on its written promises, leaving the community believing it’s just easy prey.

The expat community in the Netherlands is largely composed of highly-skilled, experienced expat professionals working for major international companies and living in the country’s major cities, Amsterdam, Rotterdam and The Hague, all of which have high costs of living. Attracted by the 30 per cent rule, expat expertise has benefited the country’s economy hugely, but the change in the rules and the way it was summarily delivered is certain to have an effect on the future hiring of essential staff.

Online protests and suggestions as to the best way to reverse the government’s decision are based on an interpretation of a ‘good governance’ statute stating residents must be able to rely on lawmakers making good on their promises, leading to the belief a court case might well be the answer. In the meantime, a petition at change.org is already gaining interest.
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