Foreign PhD candidates, post docs and other researchers working in the Netherlands are generally entitled to a number of tax deductions due to additional costs made abroad. Because application for the multiplicity of regulations is a large hassle the Dutch legislature has condensed all of these in one single regulation: the 30%-regulation.
This regulation, that is now under threat, allows the applicant to submit a request to combine all rules into a single 30% tax reduction requiring no obligation to present additional evidence. A majority of Dutch political parties now wants to get rid of the regulation in order to save funds on the general budget.
The Dutch league of universities (VSNU) estimates that between 6000 – 7000 foreign nationals working at Dutch universities use the 30%-rule. Considering the large support for limiting or to scrap the bill amongst many parties (Christian Democrats, Labour, Christian Union, SGP, Freedom Party and the Greens) the rule may soon be history.
Although most party programmes do not explicitly mention the rule, the calculations made by the central plan bureau (a government institute that traditionally calculates the financial effects of party programmes ahead of the elections) made clear what the plans of the parties were. Some, like the chairman of the VSNU, confronted members of parliament to be with their choices: “To the surprise of many you are planning to scratch the 30%-rule. That really would be the kiss of death to our international ambitions. Why did you do that?” The representatives were not able to commenta.
Significant effect on behaviour
It is difficult to say whether changing the regulation will truly result in the expected budget savings. The change is expected to save the Dutch treasury around 0.2 – 0.8 billion euro’s a year, which would require a drastic reduction in the number of foreign nationals using the rules.
Although it would still be possible to apply for tax deductions without the 30%-rule, the process will become much more complicated and tedious – for the researchers as well as for the Dutch tax authorities.
Last year the rule was challenged in the Dutch parliament when the minister of finance, Jeroen Dijsselbloem, had to admit that the positive effects of the rule were not examined. However, at the time the minister decided not to change the rules as of yet. In the current Labour programme the regulation is set to be scapped.
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