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Reducing tax benefits for expats has a detrimental effect on the tech sector in the Netherlands. This is what employers’ association VNO-NCW writes on behalf of large tech organizations in an urgent letter to the Dutch government.

Roughly 30 Dutch tech companies, including ASML, Ayden, NXP, CM.com, Booking, TomTom and Philips, are calling on the Dutch government to refrain from further reducing tax benefits for expats. The tech companies are supported by employers’ association VNO-NCW. According to the group, further interventions could make the Netherlands less attractive to highly qualified personnel.

30 percent rule

Some Dutch politicians want to reduce or abolish tax benefits for expats. At the moment, highly qualified expats can receive 30 percent of their salary free of income tax. The idea is that they can use the benefit to pay for housing, living expenses and education. Some politicians hope to limit the tax benefit to create equality with Dutch workers. In 2018, the government shortened the duration of the benefits from eight to five years.

Disappearing talent

The Dutch tech companies and VNO-NCW fear that a new adjustment will result in highly qualified talent leaving the Netherlands behind. The companies say that this limits their growth potential. They predict having to move some of their business abroad.

The current government has yet to submit a plan for scrapping or phasing out the tax rule. The Ministry of Finance refused to comment.

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