Mark Rutte, the Prime Minister of the Netherlands, did not visit his dying mother as he had to abide bhy strict lockdown restrictions to stop the spread of the coronavirus. AFP
Mark Rutte, the Prime Minister of the Netherlands, did not visit his dying mother as he had to abide bhy strict lockdown restrictions to stop the spread of the coronavirus. AFP

Dutch tax break change cheeses off expat residents



Plans by the Netherlands to scrap a major tax break for foreigners have left expatriates in a spin at a time when the country is hoping to lure multinationals as part of a Brexit exodus.

Thousands of foreign workers face a big hit to their salary under the proposals, confirmed in September as part of Prime Minister Mark Rutte's 2019 budget.

The Dutch government says few foreign residents actually use the full tax break, but major firms - including brewing company Heineken - say the sudden cut will affect expats' financial planning.

The row comes at an awkward time for Mr Rutte's government, which is separately scrapping a dividend tax in a bid to attract international firms and cash in on Britain's departure from the EU.

The move has caused "a great deal of concern among the international community in The Netherlands," says the International Community Advisory Panel for the Netherlands (ICAP) - a bridging foundation between expats, local and national government.

The tax break was introduced in the 1960s to bring in foreign talent to the land of cheese and clogs, and to boost The Netherlands' investment climate.

It originally allowed a carefully-selected group of highly-skilled foreign workers to use the so-called "30-percent tax rule" - which exempts 30 per cent of their salaries from income tax - for a decade.

The tax rule has been a drawcard ever since and is there to help newcomers cover extra costs such as school fees and pensions.

It is applied however with the proviso that expats "temporarily" remain in the Netherlands.

___________

Read more:

Expats living in the Netherlands frustrated by shrinking tax benefit

Are you liable for income tax while living in the UAE?

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In 2012, the government cut the rule's running time from 10 years to eight - and two weeks ago, it said it was slashing a further three years, meaning newcomers can use the rule for five years.

But the government is also applying the change retroactively - meaning that thousands of expats already living in The Netherlands now stand to lose the tax benefit as early as January 1.

Many expats say within three months they could be out of pocket by as much as €800 (Dh3,383).

"We accept and support the right of the Dutch government to amend its tax legislation as it deems necessary," says Jessica Piotrowski, spokeswoman for lobby group United Expats in the Netherlands.

"However, enforcing this policy change on current recipients will have significant and severe consequences on these people and their families."

Founded last year, United Expats has garnered a petition with 40,000 signatures and raised more than €35,000 for a possible lawsuit.

"I think this is a huge mistake," one foreign resident says, who asked not to be named as he works for a major international tech company.

"You can't just change things when people believe they have an agreement with government. That's how you drop people into trouble," says another overseas resident, speaking on the same condition.

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"Do I have to pay tax on UAE income when I return to the UK this summer?"

Should UAE expats ship their car home when they relocate?

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The Dutch government based its decision on the findings from a 150-page study published last year by a research group based in the city of Utrecht.

The report, which included a survey among 1,463 respondents, found that around 80 per cent of the recipients of the tax cut "don't use the benefit for more than five years".

Of those that do, around 20 per cent "actually settle in the Netherlands," meaning that the proviso of "temporary stay" no longer applies.

Finance ministry spokeswoman Heleen Haverkort says the 150-page report underlines the government's "point of view that the change to the rule should be implemented with immediate effect".

But many expatriates, a separate independent survey with more than 4,500 respondents, and major Dutch international companies like Heineken and top microchip machine maker ASML, all disagree.

The top companies backed a proposal by the Dutch umbrella group VNO-NCW - representing more than 100 business federations - as well as universities to implement the change over a three-year period.

Monique Mols, a spokeswoman for ASML, says that without the transitional period "the ruling violates an agreement."

"This is a problem. Internationals did their financial planning based on a government they thought was reliable. Now they find it's not the case," she says. "A deal is a deal."

In July, The National documented a number of foreign residents that were concerned by these new rules. Among them was Antonios Cheras, a Greek national, who moved with his family to the Netherlands five years ago due to the draw of an unbeatable tax break.

Mr Cheras, who last year bought a €400,000 house that will be ready to move into in December, says the pull-back hits both his pocketbook and his idea of Dutch fairness and stability. He now fears he might not be able to keep the house since he was counting on the tax break over three more years to service his mortgage.

“The Netherlands had a really good reputation - that the environment is stable here to develop, as a company, or as a person, but now I feel that’s not true,” said Mr Cheras.

MIDWAY

Produced: Lionsgate Films, Shanghai Ryui Entertainment, Street Light Entertainment
Directed: Roland Emmerich
Cast: Ed Skrein, Woody Harrelson, Dennis Quaid, Aaron Eckhart, Luke Evans, Nick Jonas, Mandy Moore, Darren Criss
Rating: 3.5/5 stars

Dr Afridi's warning signs of digital addiction

Spending an excessive amount of time on the phone.

Neglecting personal, social, or academic responsibilities.

Losing interest in other activities or hobbies that were once enjoyed.

Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.

Experiencing sleep disturbances or changes in sleep patterns.

What are the guidelines?

Under 18 months: Avoid screen time altogether, except for video chatting with family.

Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.

Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.

Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.

Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.

Source: American Paediatric Association
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2018 ICC World Twenty20 Asian Western Sub Regional Qualifier

Event info: The tournament in Kuwait is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.

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Film: In Syria
Dir: Philippe Van Leeuw
Starring: Hiam Abbass, Diamand Bo Abboud, Mohsen Abbas and Juliette Navis
Verdict: Four stars

JAPAN SQUAD

Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants