The government is planning to cut the 30% ruling duration from eight years to five, following the publication of a report last year which stated that most people do not benefit from the tax break for the full term.
The plans are currently beginning finalised, and will be debated by parliament’s finance committee on May 31. The final proposal will be presented to parliament on Prinsjesdag in September.
In the meantime, opposition to the proposal is mounting – particularly because the government is not planning to introduce a transition period for people who have benefited from the tax break for five years.
In other words, if you’ve had the tax break for longer, on January 1, 2019, you will have thousands of euros less to spend per year.
Employers, academic organisations and expat groups saying the proposal is damaging the country’s reputation and will hurt many people financially.
Petitions have been organised and behind the scenes, intense lobbying is taking place. The Dutch universities association VSNU is writing to tax minister Menno Snel urging him to rethink, saying the plan will hit academia hard.
Employers organisations VNO-NCW and MKB-Nederland have described the plan as ‘not good’ and say the measure will make the Netherlands less attractive compared with other foreign countries.
‘It will not make it any easier to attract foreign talent but we need that talent because of the tight jobs market,’ the organisation says. In addition, existing claims should be honoured because a ‘trustworthy government is essential for a good investment climate.’
The current plan means that someone earning around €60,000 a year will have to pay some €8,000 more in tax, plus a further penalty if their employer pays for their children to attend an international school.
The expat media have carried many stories of people who may have to give up their jobs and move, because they will not be able to pay the rent on their homes – particularly in Amsterdam, where rents are soaring.
One American expat in Amsterdam told DutchNews.nl that the change will cut his family’s income by €20,000 from next January.
‘This could potentially ruin us. We moved here in January 2014 and have just bought a house based on what our income was supposed to be until 2022. ‘Now we potentially can’t afford it, and we can’t resell and leave without incurring a huge financial loss.’
ICAP, the International Community Advisory Panel, is currently carrying out a survey on the likely impact of the cut on the country’s expats. The results will be presented to tax minister Menno Snel and members of the finance committee ahead of the their meeting.
‘We’d welcome anyone who still benefits from the 30% ruling, or who used to benefit, to take part,’ said ICAP spokeswoman Deborah Valentine. ‘It is essential that when it comes to government policy, the voice of the international community is heard.’
Author: Robin Pascoe, Dutchnews.nl
Photo source: Depositphotos.com
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