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Motion adopted on possible restriction or abolition of extra-territorial costs (ETK) scheme
The House of Representatives has adopted a motion to examine the future merit of the extra-territorial costs scheme.
A number of motions were adopted during the two-minute debate on national fiscal policy. One was a motion about the extra-territorial costs scheme (ETK scheme) in wage tax. The proposer noted that an Interministerial Policy Review (IBO) report stated that fiscal policy which leads to more labour migration in low-paid jobs is not sustainable. The proposer said that labour migration has not only economic benefits for employers but also negative social impacts, such as pressure on the housing market and on social cohesion. The proposer believes that the majority of those making use of the ETK scheme are employed in low-paid jobs in the agency sector and in agriculture.
The IBO report shows that the ETK scheme includes cost items that over compensate foreign workers relative to Dutch workers because they receive Dutch wages and expenses can be reimbursed tax-free. Abolishing or restricting the ETK scheme was mentioned in the report as a means of limiting the demand for migrant workers.
The government was therefore requested to carry out an evaluation of the future merit of the ETK scheme and present proposals to the House of Representatives for restricting or abolishing it. This motion was adopted by the Lower House.