Are there changes afoot for the plans to shorten the 30% ruling?
Recently, there has been a lot of noise concerning the shortening of the 30% ruling. According to sources in The Hague, the coalition parties could be taking another look at the cuts and possibly a less severe approach than the one we have been hearing about.
What is the 30% ruling?
Basically, the 30% ruling is a tax break for highly skilled migrants in the Netherlands. Those who meet the requirements receive 30% of their wages tax-free. Therefore only paying tax on 70% of their salary.
Since 2012, expats who meet all the conditions have been able to benefit from the 30% ruling for eight years. However, in April 2018, the Dutch government announced plans to shorten this period to five years as of 2019.
The plans to cut the 30% ruling caused uproar amongst expats and businesses alike and there have been many developments since the announcement. And now there may possibly be a new development regarding this topic.
Reconsidering the cuts to the 30% ruling
Currently, the coalition parties are renegotiating the decision to get rid of dividend tax. One of the reasons for dispensing with dividend tax was the allure the Netherlands would then have for international businesses. However, the government was unpleasantly surprised when large company Unilever decided not to move to the Netherlands after all, despite the plans to ditch dividend tax.
As talks regarding dividend tax continue, the plans to cut the 30% ruling down to five years have also made their way to the discussion table. It is possible that the government will deal with the cuts in a less severe manner and may even extend the five-year period. However, nothing is certain yet, as the Finance Ministry refuses to comment while discussions are ongoing.