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Cuts to the 30% ruling postponed

Cuts to the 30% ruling postponed

After much discussion and back and forth, the Dutch government has decided to postpone the cuts to the 30% ruling for two years. This means that those receiving the tax benefit, who would have lost it in 2019, will continue to receive it until 2021, when the duration of the benefit will be cut to five years.

Delaying cuts to the 30% ruling

The news of delaying the shortening of the 30% ruling comes after the decision not to scrap dividend tax and thus redistribute the money that this measure saves to improve the business climate. In a letter detailing the revised tax plans, State Secretary of Finance Menno Snel states, “the government has decided to implement a transition period for the group whose 30% ruling benefits would have terminated in 2019 or 2020.”

This is huge news for the thousands of expats currently receiving the 30% ruling tax break. Especially those who were faced with losing it per January 2019, when the maximum duration of the ruling would have been cut from eight years to five without a transition period.

New tax measures in the Netherlands

In addition to the decision to postpone the cuts to the 30% ruling and not to get rid of dividend tax, the government has also decided to establish cuts to corporation tax per 2021. For large firms, corporation tax will decrease from 22,5 percent to 20,5 percent. For small businesses, this tax will decrease from 16 percent to 15 percent.

Mina

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Mina Solanki

British girl living in the Netherlands, enjoying the sun *coughs*, I mean rain, and filling her time with adventures.

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GS 16:43 | 16 October 2018

This is not "huge news". The proposed reduction from 8 to 5 years will still happen and this seems to violate a bunch of laws and would not stand under judicial scrutiny. THIS IS KNOWN. Moreover, it adds even more legal uncertainty since some expats will receive some kind of transitional period, whereas the majority would not. This is in clear violation of non-discriminating laws. Menno Snel is a clear liability and he is hurting the whole business and knowledge economy of NL with his populist and opportunistic moves and mentality.

Valerie Peters 22:43 | 16 October 2018

This is good news for people facing imminent loss of income in 2019, however expats in my position are still being screwed out of what was promised to them when they came here. My ruling should go through 2023 but I should be happy over this news??? I don’t think so. A deal is a deal. Period.

GS 06:49 | 17 October 2018

The new agreement is even more insulting and violates even more the Dutch law: still, the majority of expats will receive ZERO transition period (illegal, against at least 3 basic legal principles) AND on top of that create discrimination between expats (some would get 2 extra years, some 1 extra, and most would get nothing). Is it really that difficult, or the Cabinet is on a crusade to really harm the Dutch economy?

Samara Pope 07:19 | 17 October 2018

About this new amendment to the 30 percent, some expats will get all 10 years of their benefit while I will loose 1 year, But I am not crying and making a needless fuss and extreme agitation about it ? No because what the government has done apparently is given 2 years to everyone to prepare for the end of their 30 percent benefit. There is nothing personal this, it isnt against one group or another, it isnt about divide and rule and all that childish nonsense. Its just simply 2 years. Do what you want with it including if you dont like it or cant adjust to it then prepare leave for a better situation. I personally am taking this time to look for better opportunities as well. When it was just 6 months transition, even I was up in legal arms ready to go to court. But now, it dosent make sense because the time, money and energy will only cause a loss to everyone except for those benefiting from your anger for more donations to keep them going. Think about it and remember the saying, choose your battles wisely. And be careful as per some press articles to not hid behind a general cover of 'expats' to give all expats in NL a bad name as angry, aggressive, agitators calling the government populist and what not. There are plans apparently to extend to the full duration but with this attitude from a small group of agitators, we might even loose what we have got from the efforts of the business community including AmCham. Read their statement on this.

MB 10:48 | 17 October 2018

Agree, if you lose just one year of ruling and you're notified 2 years in advance, it is probably not that material. But what about those losing 3 years out of 8? Imagine someone moved to the Netherlands with family 2 years ago and bought an apartment expecting to have higher income for 8 years and then the government says that the promise maid will not be kept, he will lose 3 years of ruling and he will have lower revenue? Do you still think it's fair? Basically it's like guaranteeing smth to a large group of people and then expecting them to adapt to any changes even if they have already made important decisions based on that guarantee. In normal economy misinformation about the future guaranteed revenue is heavily penalised, so I don't see why in this case expats should take it as a given. Personally I don't think that this situation will give bad name to expats - even Dutch that I know agree that the decision to shorted the duration to 5 years for those who already have been granted 8 years is not fair.

bletskanr 11:31 | 19 October 2018

Hi Mina, Could you pls. add references to official Dutch Gov sources? Thanks! R

minasolanki 11:37 | 19 October 2018

Hi bletskanr, Please see this document (in Dutch): https://www.rijksoverheid.nl/regering/bewindspersonen/menno-snel/documenten/kamerstukken/2018/10/15/kamerbrief-over-heroverweging-pakket-vestigingsklimaat Have a nice day :)!

bletskanr 22:19 | 28 October 2018

Thank you!

BKESS1 10:25 | 14 November 2018

Hi Mina, this article doesn't actually say that the transition period has been confirmed, it says that the possibility of a transition period is in discussions. Could you post a link where it has officially been confirmed? Thank you

jopuru 22:15 | 27 October 2018

Thanks for posting this really informative post! Is it then confirmed it's going to be postponed? Some months ago I received a letter from the Belastingdienst stating I was about to loose it, although I had it approved till APR2021. And the post talks about 2019 & 2020... what will then happen in my case? Thanks in advance!

minasolanki 09:36 | 29 October 2018

Hi Jopuru, Yes, the postponement of the cuts has been confirmed. For your individual case, we advise talking to a tax advisor, you can find one via this link: https://www.iamexpat.nl/expat-info/taxation/dutch-tax-advisors-services-netherlands Good luck and have a great day :)!

BKESS1 10:26 | 14 November 2018

The postpone of the cuts has not been confirmed, it was in discussions in October, they wanted to confirm it by mid November. So hopefully we'll hear something soon.

borderless 12:32 | 14 November 2018

Always good to have extra information available. Follow the legal analysis and what represents to violate the Dutch Law. https://www.adealisadeal.nl/legalanalysis