Hundreds of internationals in the Netherlands who were hit financially when the government slashed the provisions of the 30% ruling in 2021 have lost their case in a long-running legal battle.

That year, the duration of the tax break was cut from eight to five years, a move which also affected people who had arrived in the country after January 2016, and had expected to benefit for the longer period.

Law firm Taxperience, which brought the case on behalf of 850 international workers who lost out on several years of tax breaks, is now considering an appeal.

“A ‘deal is a deal’, and keeping your promises are two basic principles we teach our children early on,” tax lawyer Hans de Vries said. “Apparently, different rules apply to the Dutch government. The government’s budget interests take precedence over the significant financial consequences that the premature ending of the ruling has for individual expats.” 

The campaigners had argued the decision to halt the ruling early for some people was in contravention of the principles of due care, legal certainty, proportionality and equality.

The court, however, said that the impact of the legislation had been properly assessed and that it has long been established that new legislation can change existing long-term contracts. “The expats should have taken this into account,” the court said.

The campaign group United Expats, which has been fighting to retain the 30% ruling since the 2019 changes, is now assessing whether an appeal is an option.

“At the moment, we need to raise about €50,000 to finance the cost of the appeal,” Jessica Piotrowski, chairwoman of the UENL foundation, told Dutch News. “We have reached out to our community, through a community-wide survey, to determine if we can raise this amount.”

Further cuts

Last October, a majority of MPs voted in favour of a measure to reduce the 30% ruling granted to some international residents still further and to use the extra money raised to cut the interest rate payable on student grants.

People who meet stiff qualifications and are posted to the Netherlands from abroad can currently benefit from the tax break for up to five years. Omzigt’s amendment calls for the break to be reduced from January to 30% of salary for 20 months, cut to 20% for 20 months and then to 10% for a further 20 months. 

There will be a transition period for people who were already claiming the tax break in the fourth quarter of the year.

The senate has yet to vote on the latest changes but industry has already expressed its concerns, arguing that a further reduction will make the Netherlands less popular among highly sought-after foreign workers.