As expected, yesterday the Dutch Government has announced in their Tax Plan for 2019, that as of January 1, 2019, the maximum duration of the 30%-Rule will be reduced with 3 years (from 10 to 7 and from 8 to 5 years maximum). There will be no transition rules with respect to the duration for current 30%-Rule holders that got the 30%-Rule initially for 10 or 8 years maximum.
However, there will be transition rules with respect to international school fees for these current 30%-Rule holders. Normally these fees can only be reimbursed free of tax (in addition to the tax free 30%-allowance) if the 30%-Rule applies. Under the new 30%-Rule legislation also school fees can be reimbursed tax free even if the 30%-Rule does not apply anymore. This however only applies to the international school fees for the school year 2018/2019 and under the condition that the fee is paid or reimbursed by the employer in the period that the 30%-Rule would have been applicable should the 30%-Rule not have been reduced with 3 years.
Please note that Dutch Parliament still needs to approve the new legislation. This will happen in November/December this year. Please contact us should you have any questions as to what you can do to optimize your 30%-Rule period or which consequences this can have for your (net) income position.