30% tax ruling to be reduced in the Netherlands

Categorie: The market

This has been an ongoing topic in the news lately and is important especially for internationals working in the Netherlands. But what exactly is the 30% ruling and what will be the impact of the planned changes for expats living and working in the Netherlands? Simply said, this law allows expats eligible for the 30% ruling, a tax free income over 30% of their salary. The employee only pays tax over 70% of their salary. This fiscal measure was put in place based on the argument that internationals moving to the Netherlands have higher costs when relocating and settling down.

Changes to the ruling

The Dutch government announced plans to shorten the 30% ruling from eight to five years (as it stands now changes will be implemented on the 1^st of January). Their reasoning lies in an evaluation conducted in 2017 on the use of this ruling by expats. The research shows that 80% of employees receiving the 30% ruling do not make use of it for more than 5 years.

These changes have a negative consequence for expats already receiving the 30% ruling, especially the ones who already decided to build up a long residency in the Netherlands. Why? Because this change will be implemented for both newcomers and expats already receiving this tax advantage.

Undutchables’ General Manager, Nick van der Dussen, speaks up about the further consequences that this change in ruling can have, not only for internationals, but also for companies looking to establish their business in the Netherlands. You can read the full article here (note: Article is in Dutch).

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30% tax ruling to be reduced in the Netherlands

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