Budget Day Special 2025
International
Purchasing power measure for BES islands
At the BES islands (Bonaire, St. Eustatius and Saba), the rate of the lowest tax bracket for income and payroll tax is being reduced, and the rate of the second tax bracket is being increased. This shifts the tax burden from lower and middle-income earners to higher-income earners. The aim is to strengthen the purchasing power of low- and middle-income earners and to reduce income disparities.
Reducing the extraterritorial costs scheme (ETK-regeling)
The scheme for reimbursement of extraterritorial costs (ETK) is being restricted. For workers who are temporarily employed in the Netherlands, the additional costs of living (gas, water, electricity and other utilities) and additional costs of calls to their country of origin, are no longer covered by the extraterritorial costs to be reimbursed tax-free. Other costs, such as double housing and travel expenses to the home country, will continue to be covered by the scheme. The expat scheme (flat rate 30% facility, as from 2027: 27%) does not change substantively as this limitation of the extraterritorial costs is already included in the reduction to 27%.
Tip!
Check the expense allowances for incoming employees: additional living expenses and private call costs will no longer be covered as extraterritorial costs as from 2026.
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