Cabinet close to €1.4 billion plan to keep ASML, NXP in Eindhoven; End 30% ruling cuts

A last-ditch effort by the Dutch Cabinet to keep critically important high-tech companies in the Netherlands is nearly finalized, and will amount to at least a billion euros. The fund will allow for a major expansion of the Eindhoven University of Technology (TU/e), massive infrastructure investments in the Eindhoven region, more housing in the region, and possible tax breaks, sources close to the Cabinet told NOS.

The Cabinet is also looking at dropping proposals to tax share buyback plans, and to abandon Parliament's plans to get rid of the 30 percent ruling, especially now that a majority seems to think this was approved too quickly. This allows certain workers recruited abroad to keep 30 percent of their income without paying tax on it for a period of five years as compensation for relocating. In addition to the billion euros, money already earmarked for similar projects will be spent more quickly.

Reports of the secretive proposal from the caretaker Cabinet, dubbed "Project Beethoven," first leaked out on March 6. The Netherlands is desperate to keep ASML investing in the country, where it recently threatened to expand abroad instead. Based in the Eindhoven Brainport, the company makes the most advanced commercially available machinery for producing microchips, and is the third largest company in Europe by market capitalization.

ASML and Eindhoven semiconductor firm NXP both have been critical of Dutch politicians who have argued to cut all forms of immigration, seriously limit the availability of university courses taught in English, and reduce a key tax break used to lure talented workers from abroad. Dredging companies Boskalis and Van Oord have already announced plans to expand their workforce elsewhere, and ten other firms are considering an exodus.

To keep the companies in the Netherlands, the Cabinet is expected to commit to a 900-million euro expansion of education in the Eindhoven region, with a special eye towards TU/e as an investment in a future workforce with a technical education. There will also be investments in applied sciences programs and upper vocational institutions. The Cabinet will also allocate an extra 100 million euros per year to maintain the quality of education.

An additional budget of roughly 500 million euros will be allocated to build up highway and rail connections around Eindhoven. Another 100 million euros will also be prepared to support other needs, like housing construction, but with financial commitments from ASML and other companies in the region, NOS reported.

The past week, Eindhoven Mayor Jeroen Dijsselbloem said investment in the region was critical to keeping big companies in the Netherlands. The former finance minister also claimed that each expat brought to the Netherlands creates three vocational roles. Three University of Amsterdam professors also noted the importance big companies place on political stability.

The Cabinet is still wrangling with businesses and the Eindhoven region. It has not yet finalized plans, but could do soon Tuesday or Wednesday. The plan could be approved at the regular weekly Council of Ministers meeting, which will be held on Thursday, as Friday is a national holiday.