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Dutch government backtracks on 30% expat tax relief ruling
| Published: | 16 Oct at 6 PM |
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Tagged: Jobs, The Netherlands
As the Dutch government delays implementation of the widely unpopular 30% rule changes, lawyers for the expats affected declare the rule violates Dutch law.
Faced with lobbying by major international Netherlands-based companies as well as expat professionals' grassroots protest groups, the Dutch government has announced the inception of the hated law will be delayed until January 2021. Whilst the delay gives those affected time to reorganise their finances or find new jobs overseas, it still means expats who arrived in 2015 would still only have completed five years’ residency, thus losing three years’ tax benefits. Although the delay is being welcomed by expatriates, rumours are now suggesting the government may have to scrap its plan entirely, as the eight-year deal was the reason why so many top-talent professionals chose the Netherlands as a base.
According to lawyers for the United Expats of the Netherlands, the proposed 30% tax changes are contrary to the legal principles of proportionality, predictability and certainty, thus undermining their legality. Cutting the time-scale of the 30% ruling from eight to five years without allowing a transition period violates Dutch law as well as being in contradiction of the government’s transitional agreements policy and violating the principles of justification and due diligence. The law firm’s report also criticises the government’s lack of investigation into the impact the new rule will have on the 11,000 expats to whom it currently applies, thus dismissing them as a ‘limited number’.
In addition, the Dutch Council of State’s advice to the government coincides with the legal position, advising against the entire proposal as it harshly affects the current recipients as well as their families. Furthermore, it states, the proposal could lead to future legal action against the state. Obviously, it’s not over yet, but at least it gives affected expatriates time to consider their next moves.
Faced with lobbying by major international Netherlands-based companies as well as expat professionals' grassroots protest groups, the Dutch government has announced the inception of the hated law will be delayed until January 2021. Whilst the delay gives those affected time to reorganise their finances or find new jobs overseas, it still means expats who arrived in 2015 would still only have completed five years’ residency, thus losing three years’ tax benefits. Although the delay is being welcomed by expatriates, rumours are now suggesting the government may have to scrap its plan entirely, as the eight-year deal was the reason why so many top-talent professionals chose the Netherlands as a base.
According to lawyers for the United Expats of the Netherlands, the proposed 30% tax changes are contrary to the legal principles of proportionality, predictability and certainty, thus undermining their legality. Cutting the time-scale of the 30% ruling from eight to five years without allowing a transition period violates Dutch law as well as being in contradiction of the government’s transitional agreements policy and violating the principles of justification and due diligence. The law firm’s report also criticises the government’s lack of investigation into the impact the new rule will have on the 11,000 expats to whom it currently applies, thus dismissing them as a ‘limited number’.
In addition, the Dutch Council of State’s advice to the government coincides with the legal position, advising against the entire proposal as it harshly affects the current recipients as well as their families. Furthermore, it states, the proposal could lead to future legal action against the state. Obviously, it’s not over yet, but at least it gives affected expatriates time to consider their next moves.
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