Abuse of expat rule

Published: 17-05-2011

Almost 2000 Dutch citizens enjoy the tax benefits gained from the 30% ruling intended for foreign employees working in the Netherlands. This costs the treasury €25 million per year in lost tax revenue according to research from RTL Nieuws.

30% ruling
The expat ruling, also called the 30% ruling allows an employer to provide a tax free allowance of 30% of their salary (inclusive), or 30/70 of their salary (exclusive) to eligible employees for relocation expenses related to working outside their home country. The scheme provides for workers from the Netherlands who are sent abroad, and for foreign workers who are brought into the Netherlands for their specific expertise, subject to certain conditions.

Half a billion
Tens of thousands of foreign workers make use of the 30% ruling, costing the Tax Office €500,000,000 per year. About 2000 workers covered by the Dutch expat ruling were born in the Netherlands. This costs the treasury €25 million in lost tax revenue.

Example
RTL Nieuws cites the example of two Dutch Philips directors who cost the Treasury €200,000 per year. These directors receive over €20,000 tax free for costs involved with entertaining business associates and almost €7,000 because they sometimes use their private property for receiving business associates.

On the RTL Nieuws website are reactions from the Tax Office, the Ministry of Finance and 25  listed companies which RTL Nieuws has asked for clarification.

Source: RTL Nieuws.
 

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