Outgoing government will reduce the 30% ruling, Telegraaf says

The outgoing cabinet is poised to announce further cuts to the 30% tax ruling which some international workers qualify for when it publishes its 2026 spending plans later this month, the Telegraaf said on Thursday.

The paper did not say how much would be shaved from the tax exemption but said it would be made “a little more sober”, generating €20 million for the treasury.

The government had already agreed to cut the tax exemption rate from 30% to 27% in 2027 and it is not clear if this is a second cut or a restatement of the old plans.

The 2026 budget plans, which have been drawn up by the rump VVD-BBB administration after the PVV and NSC pulled out, will be formally presented to the public on September 16.

The 30% ruling, which is payable to high-earning expats as well as academics who meet a number of conditions, is seen by the VVD as having a key role in keeping the Netherlands attractive to international workers who can fill skills gaps.

Companies have warned that further reductions in the tax break, which has been reduced twice in recent years, would discourage firms from doing business in the Netherlands.

An analysis for the finance ministry last year said cutting back a tax break for foreign workers whose skills are not available in the Netherlands will lead to 15% to 20% fewer highly-skilled migrants.

The cabinet is currently in a caretaker role ahead of the October general election and that means it is limited in what it can do.

However, the Telegraaf said, the pro countryside BBB has agreed to see off plans to bring back “red diesel”, the low-tax fuel used by farmers. Bringing back red diesel had been one of the main planks of the party’s manifesto at the November 2023 general election.

The money saved by not bringing back red diesel – put at €140 million a year – will be used instead to help keep down fuel taxes for all motorists.

More money is also being allocated to keeping energy bills low, the Telegraaf said.

Many of the cabinet’s plans are traditionally leaked to the media well ahead of the budget presentation but this year’s spending plans are unlikely to contain anything controversial, given the looming general election.