30% ruling update

Many of TailorMinds’ future colleagues are eligible for the 30% tax rule, a temporary regulation with a temporary net benefit. Since the beginning of this year, the scheme has changed which has an impact for new colleagues starting this year and in the future. A brief update.

The regulation

For employees whose expertise is lacking in the Dutch labour market and who are recruited from outside the Netherlands, a decision can be requested from the Tax Office through an application for the 30% ruling. This decision gives the right to exempt up to 30% of the gross income from a certain standard amount from taxes. As a result, net income is higher during this specific period. There has been a lot of noise in the media over the past year about the scheme for being unfair. From the beginning of this year, the scheme was made more austere, requiring the benefit to be phased out after only 20 months instead of 60 months.

Difference in costs

A new colleague emigrating to the Netherlands from abroad to build a job and livelihood here has both additional initial and recurring costs that the average Dutch employee does not have. These include more expensive housing, increased costs for flights for family visits, language training, moving household goods and so on. By no means every employer is able to reimburse the total costs. The extra net benefit is desired and often needed at the time.

We also often see in the media the frame of unfairness on this scheme which we think is overblown. Also cause and effect of high rents is often linked to this scheme where the question is whether this is not a chicken-and-egg discussion.

Competitive position of the Netherlands

However it is, it is not surprising that several large companies are sounding the alarm at the recent downsizing of the scheme. This affects our country’s competitive position and perhaps causes companies to choose to move (partly) abroad. From our perspective, from annual salaries higher than €90,000 gross, we see the benefit being so great that there is more benefit than just the difference in extra costs incurred. If the companies in the Netherlands that are or will be affected by this take this up with the government, a future weakening of the competitive position can still be averted.

Working at TailorMinds

TailorMinds has extensive expertise in the field of knowledge migration and is active within the life science industry, food and chemistry. We help our clients find engineers with backgrounds in Chemical Technology, Mechanical and Electrical Engineering. We do this by taking care of almost complete emigrations. If you are interested to know more about this, feel free to contact us.