[Netherlands] Government will not implement motion to cut back expat scheme

In the Netherlands, the government has announced that, at this time, there will be no bill introduced to further limit the nation’s expat scheme, EY reports.

On 2 October, the House of Representatives adopted a motion - submitted by MP Ilse Saris (NSC) - which asked the government to significantly tighten up the 30 per cent facility for expats (expat scheme). By, for example, introducing stricter conditions: only for occupations with recognised shortages, an income ceiling, phasing out over three years and additional checks, such as address verification and a regional test in areas where there are no shortages.

The government has now reportedly responded, stating that, for the time being, no such bill will be introduced, citing the need for stable fiscal policy. 

The scheme has already been changed several times in recent years, provoking uncertainty among companies and expats. Research by SEO Economisch Onderzoek (economic research institute) demonstrated that the scheme is vital for attracting international knowledge workers, particularly in sectors with major shortages, such as ICT and technology.

Dutch employers must remain competitive with businesses in other countries. The expat schemes of its neighbours are often more generous than in the Netherlands, so reducing the scheme would put its companies at a disadvantage and could harm investment. In addition, the scheme reportedly yields more for the Treasury than it costs. 

Practical objections have also played a part. The government considers it unfeasible to annually determine which occupations are affected by shortages or assess, per region, whether the scheme should apply there. The Tax and Customs Administration lacks the resources for such a challenge, and the government also needs realistic deadlines for such far-reaching legislative changes.

Source: EY

In the Netherlands, the government has announced that, at this time, there will be no bill introduced to further limit the nation’s expat scheme, EY reports.

On 2 October, the House of Representatives adopted a motion - submitted by MP Ilse Saris (NSC) - which asked the government to significantly tighten up the 30 per cent facility for expats (expat scheme). By, for example, introducing stricter conditions: only for occupations with recognised shortages, an income ceiling, phasing out over three years and additional checks, such as address verification and a regional test in areas where there are no shortages.

The government has now reportedly responded, stating that, for the time being, no such bill will be introduced, citing the need for stable fiscal policy. 

The scheme has already been changed several times in recent years, provoking uncertainty among companies and expats. Research by SEO Economisch Onderzoek (economic research institute) demonstrated that the scheme is vital for attracting international knowledge workers, particularly in sectors with major shortages, such as ICT and technology.

Dutch employers must remain competitive with businesses in other countries. The expat schemes of its neighbours are often more generous than in the Netherlands, so reducing the scheme would put its companies at a disadvantage and could harm investment. In addition, the scheme reportedly yields more for the Treasury than it costs. 

Practical objections have also played a part. The government considers it unfeasible to annually determine which occupations are affected by shortages or assess, per region, whether the scheme should apply there. The Tax and Customs Administration lacks the resources for such a challenge, and the government also needs realistic deadlines for such far-reaching legislative changes.

Source: EY