The dispute over the 30-Percent Tax Ruling between highly paid internationals and the Dutch government might be heading to the courts.
United Expats of the Netherlands Foundation has hired Tom Barkhuysen at Amsterdam-based law firm Stibbe to investigate whether the government can legally cut the 30-percent ruling without a transition period.
The results of legal research, commissioned by the United Expats of the Netherlands Foundation and prepared by Stibbe, “indicate that this policy violates Dutch law, disproportionately harms international families, and is contrary to the goals of fostering a better business climate in the Netherlands,” stated Jessica Taylor Piotrowski, Ph.D., UENL communication chairwoman
The new Dutch policy, part of the overall budget, will not include transitional measures which ensure that term limits for current recipients are respected, Piotrowski wrote.
The UENL position is that proposal to cut the 30-Percent Ruling retroactively to five year from eight years is “contrary to the principles of legal certainty, predictability, and proportionality.”
From the release:
Even more, the lack of transition measures is in direct conflict with the Staatssecretaris’s own published policy on transitional law in tax legislation and with the principles of due diligence and justification. As such, the proposal is unlikely to meet judicial scrutiny should it go into law and, therefore, the 2019 Tax Plan should be amended accordingly
The 30-Percent Ruling allows about 60,000 expats, as well as Dutch nationals who have been away for more than 10 years, to exempt 30 percent of their total taxable salary. In other words, if they earn 100,000 euros per year, only 70,000 euros would be taxed. UENL leadership contents expats were assured they would get the tax exemption to cover costs of moving to a new country, as well as increased cost of living, and budgeted accordingly.
Late last year, Dutch officials announced they were considering changing retroactively the 30-Percent Ruling, one of the highly skilled internationals’ best financial incentives to come work in the Netherlands. On April 20 the Council of Ministers announced the length of time expats can take advantage of this substantial tax break will be cut to five years from eight years effective January 1, 2019. And that applies to everyone – new arrivals and those already taking advantage of it.
From Mike Arthur, who’s overseeing the Change.Org fundraising effort:
As you know, despite our best efforts at diplomacy, the 2019 Proposed Tax Plan (which was released on 18 September) does not include transition measures for the #30Rule. At UENL, we find this to be a harsh and unfair policy that will dramatically affect the lives of thousands of expats and their families. Even more, we question whether the government can legally propose such legislation without transitional measures.
The 2019 Tax Plan “sends the message to future expats that promises from the Dutch government cannot be trusted. And now, this Legal Document powerfully shows that the budget proposal not only harshly impacts current recipients and their families, but moreover, it violates Dutch law and is ground for future legal action,” Arthur wrote.
If the government aims to produce legislation that follows good governing policy, while “maintaining their reputation as a trustworthy government that both skilled expats and businesses can invest in for the long term, they will honour their commitment to thousands of expats and their families by amending the 2019 Tax Plan.
EUNL “provided our Legal Document to the Finance Committee and call upon Parliament to adopt its conclusions.”
You can see the Change.Org petition here.
UNEL began as a grassroots organization in April 2018 and formed an official Stichting (foundation) in August 2018. The group is comprised of highly skilled professionals living and working in the Netherlands, and formed in response to a proposal of the Dutch Ministry of Finance to reduce the term length of 30-Percent Tax Ruling. Since its inception, UENL has been encouraging the government to stand by the deal they made with current recipients of the 30-Percent Tax Ruling so that any changes apply to future expats, not to those already here.
With more than 40,000 signatures on its Change.org petition, 8,000-plus members on Facebook, and global and local media coverage, UENL continues to raise awareness of the consequences of this proposal.
Now, UENL will be leading the effort to assess the legality of the government’s decision to exclude a transitional period from the 2019 budget. In their video, “A Question for Premier Rutte,” UENL members highlight how their lives will be dramatically affected by the lack of transitional regulation and call upon the government to stand by their word. Afspraak is