May 16, 2022

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Cancellation of tax benefits for expatriates?  Do you sleep on it for a few more nights?

Cancellation of tax benefits for expatriates? Do you sleep on it for a few more nights?

If it is up to the FNV, the expatriate scheme may be scrapped. According to the union, the scheme in its current form is overcompensation, especially for those with higher incomes.

“The scheme was created to attract employees who are in scarcity. But to test this, only income is taken into account,” says FNV Director Amrit Segobind. “We see it as a revenue model for companies to bring people in for the tax credit. In doing so, they crowd out others in the job market.”

However, the Federation believes that a transitional arrangement should be introduced. In this way, arrivals, who are now covered by the plan, do not suffer disadvantages without being able to prepare for them.

More tax revenue?

Tax experts fear that the Netherlands will injure itself if the expatriate scheme is scrapped altogether. Because at present, with the exception of Germany, every country in Western Europe has a tax code that is useful for foreign employees. Since this year, Belgium has introduced a new scheme for expats almost identical to that of the Netherlands.

“If fewer companies with employees are coming here or even leaving, the question is whether you are also getting more tax revenue,” says Robert Royers, tax advisor at International Payroll Tax and partner at EY.

Robin Froger, tax advisor on payroll tax and partner at KPMG Meijburg & Co., agrees. “The scheme has been around for more than 50 years and competing countries in the European Union have similar schemes. If we cancel the scheme and then regret it, in practice we can’t reverse it. Sleep.”

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These countries also have an expatriate scheme: