As most of you probably already know, it has been proposed to reduce the duration period of the 30% ruling from 8 to 5 years as of January 1, 2019.

Many companies, organizations and expats have already expressed their concerns regarding this proposed reduction, especially because it also applies to existing 30% rulings.

In a recently published letter, the Secretary of Finance has defended and held on to the proposed changes without a transitional rule. He argued -amongst others- that these changes have already been announced/budgeted for in the 2017 Coalition Agreement and the fact that parties using the 30% ruling are informed about the effects of future legislative changes when they opt for application of the ruling. Furthermore he emphasizes that this is the only change of the 30% regime, suggesting it has only a minor effect if one considers the total regime. It is noted that the abolishment of the 30% ruling is not subject to discussion, the 30% ruling as such will continue to exist according to the Secretary of Finance.

We have found one positive remark: it is explicitly noted that international school fees for the school year 2018/2019 paid in 2018 can still be reimbursed tax free in 2018 for employees whose 30% ruling will end as per January 1, 2019.

In view of the numerous comments, we feel it is still possible that a transitional rule will be proposed and accepted during the legislative process.

We expect more details to be known after Budget Day (3rd Tuesday in September).