Discrimination within the EU! Will new rules for the 30% ruling be accepted by parliament or the European Court of Justice? ask Ton Krol and Arnold Waal.

Junior finance minister Frans Weekers is planning to change the rules covering the 30% tax ruling – a move that has prompted much confusion and anger on expat forums.
One of the requirements is that the employees are directly recruited from abroad. Weeker’s plans state that EU-residents living within 150 km of the Dutch border will no longer qualify for the 30% ruling. This basically rules out Belgium entirely and a part of Germany.
Discrimination
Will this discrimination be accepted by the EU? We have our doubts. East Germans or French residents can qualify while some West Germans or Belgians cannot. This is hardly conducive to the free movement of people.
It will also lead to odd situations. What if you come from Brussels and get a job in Groningen, which is 360 km away? Groningen is a long way from the border with Belgium and no way a distance to commute daily.
And what if you are Russian and working in Brussels and then get a job in the Netherlands? Do you count as being from Brussels or Moscow?
Income tax
The 30% ruling implies that 30% of your gross income is exempted from taxation. This is the best tax benefit you can have in the Netherlands and this ruling makes the Netherlands much more attractive for expats to start working here. Without this ruling the Dutch tax rates are so high that more than half of your salary is taxed away.
The finance ministry plans would deny this ruling to EU residents living within 150 km of the Dutch border. Furthermore they want to introduce a much higher minimum income requirement so that only people earning more than €50,000 a year will qualify.
One good thing about the reforms is the intention to introduce a lower income requirement for PHD graduates. But what use has the special exception for PHD students who stay in the Netherlands after their study, if the professors who have the knowledge cannot benefit from the 30% ruling? Universities have their hands tied by budgets.
We know from experience that foreign professors are willing to work here because their net salary is high enough as a result of the 30% ruling. If they do not qualify anymore because they do not meet the higher salary requirements, these highly skilled professors will leave. After all, good research and tutoring students can be done everywhere.
High rates

The new regulations find their origin in the sharp increase in 30% rulings granted over the last decade. The government is of the opinion this has been caused by stretching the rules over time and now is the right moment to crack down. The new rules are so strict that only the high earning elite will qualify.
We believe that globalization and internationalization of the Netherlands is the cause. The ruling is so popular simply because more highly skilled foreigners work in the Netherlands.
We are of the opinion that stricter rules will hurt the Dutch society and economy. And the finance minister should bear in mind why the 30% ruling was introduced in the first place: to soften our high tax rates. So the more you reduce the tax burden on salaries the less need there will be for a 30% ruling.
Ton Krol is the owner of Blue Clue Tax Solutions, Arnold Waal owns Orange Tax Services