Denmark does this, but only for a limited period (7 years I think). Part of it is competitiveness to make competing for top talent on par with lower tax countries. The other part is the temporary nature since higher earners are more likely to return to their home countries.
I have mixed feelings about this. The Netherlands is an expensive country to live in, and this is paid for using taxes. If you decide to live and work in The Netherlands, i would expect you to pay the same amount of taxes as others.
Then again, i can understand the argument that indirectly the company is paying tons of taxes because it is a big company. Losing that company + its employees might be a bigger negative in tax income than having those employees pay less taxes.
What you are saying is totally reasonable, but perhaps you are not considering the additional costs trat migrants face when establishing themselves in a new country. Not only financial, but also immaterial
costs such as leaving behind friends and family, dealing with the language barrier, bureaucracy, the initial loneliness, occasional xenophobic manifestations, maybe cultural differences, etc.
In this light I think that temporary tax breaks like this are a nice way to ease immigration and create more of a win-win situation.
> If you decide to live and work in The Netherlands, i would expect you to pay the same amount of taxes as others.
Fair, but worth noting that highly skilled migrants are also paid more than average, and thus the absolute amount of tax contributed in their lifetime turns out higher despite a few years of tax breaks.
I'm not entirely pro tax breaks for skilled immigrants but a good argument which I support is that a skilled immigrant cost absolutely nothing to be trained for the receiving country.
They didn't receive education, their parents didn't get childcare support, it didn't cost a single penny in taxes from the host country to get skilled labour who'll pay higher taxes than a lot of native population even after tax breaks.
A temporary tax break would probably just even out the equation in the end, if the immigrant stays for longer then the balance would tilt back to the host country benefitting more in total taxes received over a lifetime.
> In this light I think that temporary tax breaks like this are a nice way to ease immigration and create more of a win-win situation.
I think it's naive to think this money ends up with the worker. Realistically, what happens is that companies like ASML can pay their migrant workers less than they would have to otherwise.
Remove this tax break, and ASML will have to raise salaries or lose those migrant workers to other countries - or, god forbid, hire more Dutch workers.
People are generally net tax contributors during working age (25-65) and net recipients at younger and older ages. Expats are typically in the country only during working age years. If they decide to settle longer term, they'll pay the same tax as anyone else (the tax benefits expire after 5 years). On average, probably even more so (they'll likely have lower unemployment risk than the median Dutch). So from a fairness point of view, I think a few years of tax benefits is perfectly justifiable.
