Dutch budget: more money to police and defense, new early retirement scheme

The Cabinet will not be abolishing tax breaks for foreign workers after all. This is one of the decisions taken by the Schoof Cabinet together with the coalition parties for next year's budget. The police will also receive an additional two-digit million sum each year, and the defense sector will receive more money due to economic growth. Insiders confirm such reports from various media.

According to innovative companies, the ruling that expats do not have to pay tax on 30 percent of their salary in the first few years is absolutely necessary. However, some parties, including the coalition party NSC, are very critical of the ruling. Consequently, the ruling is to be gradually reduced to 10 percent. This austerity measure is largely off the table: the percentage of wages on which no tax is levied is now 27 percent.

Recently, the Cabinet has been negotiating the budget with the four coalition parties. As announced in the coalition agreement, the Cabinet primarily wants to reduce expenditures next year. However, the child allowance will be increased, and there will be an additional tax bracket so that people will pay less tax on the first part of their income.

Schoof is satisfied with the outcome of the budget negotiations. "I am convinced that we have reached a good and balanced budget. A budget that remains within the budgetary framework and with which we simultaneously ensure that everyone will benefit in their wallets next year. That is good news for the Netherlands," the Dutch Prime Minister told RTL Nieuws. The coalition parties have been at the budget negotiating table since mid-August.

However, the budget deficit will increase to 3.3 percent of GDP by 2026, according to Nu.nl. This would exceed the 3 percent limit that the EU has imposed on member states for several years. The NSC and the VVD, in particular, are responsible for adhering to the budget deficit limit.

New early retirement scheme

The land transfer tax for landlords is falling. On the contrary, the tax has been raised slightly again and again in recent years. Now, the Cabinet is lowering the rate from 10.4 percent to 8 percent. In return for the tax relief for house landlords, the Cabinet is also introducing a measure for poorer families: free school meals are to be extended after all. This was also a major wish of the opposition.

Social Affairs Minister Eddy van Hijum has already indicated that money will also be set aside for a new early retirement scheme. The existing tax exemption, which allows companies to allow employees in physically demanding professions to retire earlier, expires at the end of next year. The government will consult with employers and employees on a structural scheme.

According to Prime Minister Dick Schoof, the fact that the positive side of the budget was immediately leaked is not a big problem. The Prime Minister grants every journalist "his hunt for news," he said with a grin during his press conference. He already revealed that "people will simply be better off in their wallets next year."