Expats across the Netherlands are up in arms about the government plans to reduce the time period for the 30% tax ruling. “The government intends to reduce the duration of a tax scheme for employees from abroad, the so-called 30% ruling, from eight to five years as of 1 January 2019”, reads a statement issued by the Ministry of Finance on 20 April.
According to the Ministry, “the shortening will apply to both new and existing cases”. This means that, not only do they want to cut the period back from eight to five years, they want to do so retrospectively. This particular amendment has infuriated members of the Dutch expat community in the Netherlands. A Facebook group called the “International Professionals against Retroactive Ruling (IPARR)” has been formed. It already has thousands of members.
This group has called expats to action. One of this group’s administrators, Engelbrecht Felberthann, called on members to share their personal stories with the government using a contact form. In another post, he writes, “I had a conversation with members of the largest employer organisation in the Netherlands. I shared some of your concerns and issues with them. Based on their feedback, they will now kick off an intense dialogue and negotiations with the Dutch government over the next 2-3 weeks.” It is hoped that this will make the national government reconsider this intended ruling.
A member this group has also started a petition on www.change.org. Here it says, “By signing this petition, we urge Dutch lawmakers to amend this rule change by allowing expats currently residing in the Netherlands with 8 years %30 ruling grants to keep their ruling for the full 8 years, and only apply changes to expats who come to the Netherlands after the law is in effect.” It is expected that this petition will easily exceed its goal of 10 000 signatures.
It is not just the expat community that is pitted against this change in regulation. The business organisation, VNO-NCW, has urged the government not to implement this change. “It is not right that the duration of the 30% facility for foreign expats is shortened from eight to five years, and that this measure also applies to existing cases. This is at the expense of the business climate” they, and MKB-Nederland said on the VNO-NCW website.
As to the reason why the government want to implement this change, the Ministry of Finance statements reads: “The evaluation of the 30% ruling was carried out in 2017 by the research bureau, Dialogic. The evaluation shows that around 80% of employees do not use the scheme for more than five years.” It goes on to say that of the approximately 20% that the scheme uses up to eight years, a substantial number of people move to the Netherlands for a period of longer than eight years. “Moreover, in neighbouring countries with comparable schemes, a term of five years applies virtually everywhere”, the statement reads.
The Cabinet intends to include the changes in the Tax Plan 2019 package that will become public on Prinsjesdag (20 May).
For Eindhoven News: Melinda
A government that goes back on its commitment gives a really poor impression. How much can I trust a government which yesterday said “Come to work in the Netherlands and I’ll grant you 8 years with 30% ruling” and today says “oh, I actually meant 5 years”.
This is exactly right. It’s not that the term was shortened per se – we all respect the right of the government to set whatever rules it pleases (even rescind the 30% ruling altogether) – it’s specifically the bad faith retrospective nature of this that we object to, for people who have already made financial and life decisions based on the original agreement. When the government shortened the 30% rule from 10 to 8 years, it did not do this – so why is it necessary now? There is no dire austerity in the Netherlands right now, and in fact there is still a growing shortage of highly-skilled workers who are attracted by the 30% rule. It makes no sense to do this on any level – forget about expats, it’s just terrible policy for the Netherlands as a whole…
[…] government announced its intention to change the 30% tax ruling applicable to expats. This caused outrage among the expat community. They are, in particular, unhappy about the retrospective aspect of the proposed […]