Eight questions about the ‘expat scheme’

Expats in the Netherlands, among whom there are many scientists, are angry and considering going to court now that the government wants to scrap their tax benefit. At TU/e there are approximately 520 employees using this so-called 30% scheme, which grants them that tax benefit. If the scheme is carried through in its entirety as is intended now, this will affect several dozens of them. What exactly is going on, though?

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photo Lingaraj Bharamagoudar

Various attempts have been made to dissuade the government from this idea, but in spite of tens of thousands of signatures and a letter from Dutch employers the measure was still featuring in the Budget on Budget Day. Which implies that the so-called 30% scheme for expats will almost certainly be scrapped next year. And no, no exception will be made either for researchers, as universities and Institutes of Higher Professional Education would have liked.

Tanja van der Brugge, acting head of Personnel and Organization, says that at present some 520 people are making use of the scheme at TU/e. "If the arrangement should really be implemented later as is planned now, this will affect several dozens of people as at January 1, 2019. Mind you, you haven’t heard the last of this yet and so far no final decision has been made in the House of Representatives. Should it come to that in the end, then we shall get in touch with the employees concerned as soon as possible."

Jo van Ham, Vice-President of the Executive Board, said as early as in mid-May that TU/e, too, is dead against this. "It undermines our position in the recruitment and retention of international talent. We are simply becoming less attractive to scientists", said Van Ham at the time.

What exactly are the consequences of the measure, though, and can it still be reversed? Eight questions about the tax benefit for foreign employees.

What again is the 30% scheme?

Highly-educated employees from abroad get a 30-percent credit on their income tax for an eight-year period. This is intended to compensate them for extra costs, such as moving or double rent. The scheme only applies to expats with sizeable salaries (amounts may differ) who possess specific expertise that is scarce in the Netherlands. In this way the government wants to make the Netherlands attractive to companies and foreign experts.

What is going to change?

Although the scheme works fine, it could be more economical, said a report last year which had been commissioned by the Ministry of Finance. Therefore the government next year wants to reduce the term of the scheme from eight to five years, this being without a transitional arrangement for expats already living in the Netherlands.

Why are the expats angry?

It is particularly that last-mentioned aspect which grieves expats. They took this benefit into account when deciding to come here and feel that the government is not adhering to its agreements and may possibly even be violating human rights.

Human rights?

Ja, Article 1 of the protocol to the Human Rights Treaty, to be precise. That deals with the protection of property.

Is it really that bad?

They do think so. On their website there are dozens of stories from people and families who are impacted in their financial situation due to this austerity measure, like Carla from Portugal. She likes her work as a researcher and lecturer at a university so much that she has recently bought a house in the Netherlands. However, if the measure is upheld, she cannot pay her mortgage any longer and will have to look for a job in another country. “If the Dutch government cheats me like this, I would be left with a very bad general impression of the country indeed.”

What are the expats planning to do now?

Within one month the Stichting United Expats of the Netherlands has raised almost 45 thousand euros by means of crowdfunding. Now the expats are seeking legal advice from a law firm, which is going to find out whether the government is breaking the law through this sudden amendment. The so-called ‘legal opinion’ is expected next week and may form the basis for a potential lawsuit. Furthermore, the expats hope that the measure will not be adopted by the House of Representatives.

What does the business community think of this?

Employers do not like this plan at all.

And what about universities and Institutes of Higher Professional Education?

They do not like it either. Thus, it is feared by universities that foreign scientists will ignore the Netherlands in the future. “Especially in higher scientific positions, universities can compete internationally thanks to the thirty-percent scheme. If international top talents stay away, this will have a major impact on our scientific output”, they wrote earlier in a letter. According to universities association VSNU one in three scientists at Dutch universities is from abroad. Often they are young researchers with relatively low salaries who could not live in the Netherlands if it were not for the thirty-percent scheme. Even in September the VSNU submitted a proposal for a transitional arrangement, but it was of no avail.

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