In the past five years, the number of highly skilled migrants who receive the 30 percent tax break in the Netherlands has almost doubled. More than 92.000 foreign workers benefit from the 30 percent ruling, costing the Dutch government over 1 billion euros a year. 

More migrant workers with Dutch tax break

The 30 percent ruling is a tax advantage for highly skilled migrants working in the Netherlands. Other European countries, such as Belgium and Portugal, have similar tax advantages to attract skilled workers from abroad.  

There are more than 92.000 internationals in the country who get a monthly tax break, compared with a total of around 95.000 in the rest of the EU, Follow The Money reported based on research from the EU Tax Observatory.

In the years since the coronavirus pandemic, the number of applications for the 30 percent tax break has grown steadily. The past five years have seen the number of people receiving the benefit increase by 85 percent. 

Dutch tax break application numbers expected to grow less rapidly

It is estimated that the 30 percent ruling in the Netherlands saves a recipient around 12.000 euros per year. This makes it the most costly tax break scheme in the EU, costing the Dutch government more than 1 billion euros yearly. In comparison, tax breaks for migrant workers cost Portugal around 620 million euros per year and Belgium 137 million euros per year. 

As more expat workers apply for the scheme and wages increase, it will cost more money each year. The Ministry of Finance expects the tax ruling to cost 10 percent more in 2024 and 2025, but anticipates a slower increase of only 5 percent yearly after that as application numbers decline.

Government plans to decrease the 30 percent ruling to 27 percent are also likely to save more money. Initially, the tax ruling was going to be scrapped completely, but reports that it could damage the economy and make the country less attractive for businesses caused a reversal of the original plans.

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