The Netherlands: Review Commences Into Recent ‘30 Percent’ Preferential Tax Rule Restrictions

• Scope of review. This SEO Amsterdam Economics review will consider how companies have been affected by these reforms, including the potential impact on attracting and retaining foreign workers.
• Survey. As part of this process, SEO Amsterdam is seeking stakeholder input. Employers can provide feedback here; while employees can do so here. The deadline for this survey is April 14, 2024.

The review may affect whether the current long-term reductions in the preferential tax treatment remain in place, are annulled, or are otherwise modified. It is worth noting that the Dutch Upper House, when approving the restrictions, nonetheless requested that the government develop alternative solutions that would have a less damaging impact on the Dutch economy.

• Previous rule. Under the previous rule – which sought to increase the Netherlands’ attractiveness to foreign talent – eligible foreign nationals did not need to pay tax on up to 30 percent of their income for five years.
• Recent changes. From January 1, 2024, restrictions on this ‘30 percent’ preferential tax treatment went into effect, with the amount of preferential tax treatment to now reduce sequentially over the five-year period – from 30 percent in the initial period of residence, to 20 percent in the interim portion, and then down to 10 percent in the final period of residence.

Fragomen can assist clients to complete the survey process.