D66 and CDA plan to halt 30 percent ruling cuts in new coalition proposal

Dutch parties D66 and CDA have submitted a 17-page outline of proposals they want to include in a new coalition agreement. Plans include restoring the 30 percent tax break and increasing housing construction. 

Expat tax break included in Dutch coalition proposal

The plan that D66 and CDA have been working on for the last two weeks focuses on five main areas: housing, migration, the economy, nitrogen pollution reduction and defence. One of the most notable points for internationals is the restoration of the 30 percent ruling - a tax break that allows highly skilled migrants working in the Netherlands to claim the first 30 percent of their income as tax-free during the first five years of residency.

After changes that would see the 30 percent ruling phased out completely were reversed, the government decided to reduce the tax break to 27 percent by 2027 instead. The two parties want to restore the 30 percent ruling to continue attracting highly skilled workers and researchers. 

“The Netherlands has a great need for skilled professionals and bright minds. We want to be a country that does not retreat behind the dikes, and where people can develop their talents,” the parties write in the outline document (in Dutch). For this reason, the parties also want to invest more in scientific research and digital infrastructure.

New coalition plan “outstretched hand” to other parties

Another proposal included in the document is to designate 21 large-scale new construction sites throughout the Netherlands to form new neighbourhoods or even cities, reports NOS. The two parties also want to phase out the mortgage interest tax deductions for homeowners. 

Achieving the legal nitrogen target by 2035 and partially reinstating conscription to build soldier numbers to at least 122.000 in the next five years are other points mentioned in the document. Even with all these plans, D66 and CDA have stressed that they are leaving space for other parties to include their own proposals for their “positive agenda”, stating in the document that it is “not a detailed coalition agreement but an outstretched hand”.

While D66 and CDA have taken tentative steps in forming a coalition government, more parties are needed to form a majority cabinet. Rob Jetten, leader of the largest Dutch party D66, initially favoured a centre coalition with CDA, VVD and GroenLinks-PvdA. However, VVD leader Dilan Yeşilgöz has repeatedly ruled out being part of a coalition with GL-PvdA, preferring a centre-right cabinet with JA21.

Informateur Sybrand Buma is set to meet with all parties in the Tweede Kamer over the coming days to determine which parties would be willing to form a coalition or support the parties' proposals. “I hope that other parties will look at this agenda with an open mind,” Buma said. “It should be read as an invitation that hopefully other political parties, but also organisations in society, social partners and other branches of government can find opportunities to co-operate.”