NETHERLANDS. The tax on dividends remains and the cabinet therefore has enough money to meet the demands of expats whose tax benefit is being decreased. But the expats remain vexed and threaten to go to court.
Highly educated employees from abroad, including a large number of academics, receive 30 per cent of their income tax-free for a period of eight years. This is to compensate them for extra expenses, such as moving costs or paying double rent. The ruling only applies to those expats with a considerable salary (the level can differ) who have specific expertise that is scarce in the Netherlands. In this way, the government wants to make the Netherlands more attractive to businesses and foreign experts.
But the duration of this so-called 30 per cent ruling will be reduced from eight to five years as of January. The ruling works, but it could be more frugal, stated a report commissioned by the Ministry of Finance last year.
There was going to be no transitional arrangement for those who are already making use of the ruling. The expats responded furiously. They took the tax benefit into account when they came here and threatened to take the matter to court.
Last week, it was announced that there will be a transitional arrangement after all, but only for expats for whom the 30 per cent ruling expires next year or in 2020. The cabinet is paying for this with money that has become available because the tax on dividends remains. Details of the transitional arrangement are not known yet.
The expats call this a step in the right direction, but they are far from satisfied, says Jessica Piotrowski of the United Expats of the Netherlands foundation. “A large number of people do not qualify for this transitional arrangement. That’s not fair, a deal is a deal for everyone.” The foundation is now contemplating further action.
Universities and universities of applied sciences were far from pleased with the abolishing of the ruling too. “With this 30 per cent ruling, universities are able to compete for the higher academic positions on an international level. It will have a huge impact on our scientific output if international top talent stays away,” they previously wrote in a letter.
According to university association VSNU, one out of three academics at Dutch universities comes from abroad. They are often young researchers with a relatively low income for whom living in the Netherlands would be impossible without the 30 per cent ruling. The VSNU submitted a proposal for a transitional ruling in September, but this was to no avail.
According to the expats, the government is possibly even violating human rights. Article 1 of the protocol of the Convention on Human Rights, to be exact. This article concerns the protection of property. (HOP)