During the Accountability Debate held in the House of Representatives on 26 May, Finance Minister Dijsselbloem stated that the 30% scheme will not be amended for the time being. However, an evaluation study will be carried out, the results of which are expected in 2017. Depending on these results, a decision will be made on what to do with the 30% scheme, but this will, of course, be a matter for a new government.
Question marks
Dijsselbloem discussed the 30% scheme during the Accountability Debate following the findings of a study carried out by the National Audit Office. In its report, the Court of Auditors expresses serious doubts about the effectiveness of the scheme, which involves around €700 million of taxpayers’ money each year. Around 52,000 foreign nationals make use of the 30% scheme. They each receive an average of €13,500 in wage subsidies per year.
Expats
The 30% scheme is available to expats. These are employees from abroad who come to work in the Netherlands. They are entitled to receive a tax-free allowance amounting to 30% of their salary (including the tax-free allowance under the 30% scheme) to cover their so-called extraterritorial costs. The 30% allowance is not charged against the discretionary allowance under the work-related expenses scheme, but qualifies as a targeted exemption.
Extraterritorial costs
Extraterritorial costs are the additional costs incurred by an expat as a result of working in a country other than the one in which they live. These include costs associated with maintaining two homes or storing household effects, settling into life in the Netherlands, costs of maintaining contact with their country of origin, travel expenses incurred when visiting their country of origin, higher living costs due to the cost of living in the Netherlands, and so on.
However, one of the attractive features of the 30% scheme is that there is no need to demonstrate what extraterritorial costs an incoming expat actually incurs.
Pay criterion
Only in the professional football The Tax and Customs Administration is currently still checking whether the foreign national recruited meets the criterion that he or she brings expertise that is in short supply in the Netherlands. In all other sectors, this test has been replaced by the legislator with a wage criterion.
Request
Applications for the 30% scheme must be made using a form available on the the Tax and Customs Administration’s website. This application must be submitted before the 30% scheme is applied. The Tax and Customs Administration will issue a decision on the application. This decision is valid for a maximum of 8 years. If the expat moves to another employer, the 30% scheme may be continued, provided that the conditions are still met and a new application is submitted in good time.