Expats in The Netherlands will lose a valuable tax break from the start of 2019.
The Dutch government has allowed expats to take 30% of their salary tax free for eight years in a bid to attract more badly needed professional workers to the country.
But the tax break will shrink to five years from January 2019 – but expats will still only pay tax on 70% of their salaries.
The 30% tax rulingpolicy was a reward for bringing skills to the country and a reimbursement of relocation costs, like travel expenses, visa fees and paying rent.
The government decided to shorten the tax-free period after research revealed eight out of 10 expats only stayed for five years, while the rest tended to stay for longer than eight years as permanent residents.
The tax change will hit new claimants and those already receiving the allowance.
To qualify for the 30% tax ruling, expats should earn 37,296 euros or more a year – although lower limits may apply to workers with a master’s degree who are not yet 30 years old. Some scientific and medical posts have no minimum salary requirement.
The Dutch finance ministry has dismissed calls for a transition period for claiming the tax advantage from expats who have been in the Netherlands for more than five years.
A Facebook campaign and petition protest has garnered around 4,100 supporters, although 60,000 expats are claiming the tax break.
The Dutch treasury says the 30% tax ruling will cost the nation more than 900 million euros in 2018.
Expats pay more tax in Vietnam
The government in Vietnam has announced that controversial plans to make expat workers pay social securityis likely to become law within a month.
The measure will apply to expats with employment contracts of a year or more.
“This group excludes foreign workers who are temporarily transferred to work in Vietnam from overseas parent companies, regardless of whether they have labour contracts or not,” said a government spokesman.
The payment will cover sick pay, maternity leave, a pension and other benefits.
Workers will pay at a rate of 8% of their gross salary, while employers will contribute 17.5% of a worker’s pay.
Companies fear the extra costs will make the price of their goods less competitive.
