Highly educated foreign people working for Dutch employers, including many academics, are eligible for a 30-percent income tax cut for an eight-year period. However, it was announced a little while ago that the effective term of this so-called 30% ruling would be reduced from eight to five years, effective 1 January 2019. And initially, there were not going to be any transitional provisions for current beneficiaries of the scheme.
The expats were furious. They were counting on receiving the tax break for the full eight years when they made the decision to come to the Netherlands and threatened to sue the government. Dutch tertiary education institutions were not particularly happy either, and said they feared that talented expats would no longer be willing to come to the Netherlands.
It was announced on Monday that transitional provisions will be introduced after all, but only for expats who will stop being eligible for the 30 percent scheme next year or in 2020. These expats will continue to receive their tax break. The government can afford to give them this break because of the additional money that became available when it was decided that dividend tax will continue to be levied in the Netherlands. It is not yet known what exactly the transitional provisions will entail.
The expats say that yesterday’s decision was a step in the right direction, but they still aren’t satisfied, according to Jessica Piotrowski of the United Expats of the Netherlands Foundation. “Quite a lot of people will not be eligible for these transitional provisions. That is not fair. A deal is a deal – for everyone.” The foundation is deliberating on the next steps to be taken. “But we will continue the fight, no matter what happens.”