When a company in the Netherlands is faced with a reorganization, this can have consequences for expats working there. They may worry about their rights and future. Expats often work under specific conditions and with work permits. As a result, the impact of job loss can also affect their residence status. We discuss the rights of expats in a reorganization, the consequences for their residence and work permit. But also the effect on tax benefits such as the 30% ruling.
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What does a reorganization entail?
In a reorganization, a company restructures to, for example, improve efficiency or profitability. This may mean that functions are changed or even disappear. In such situations, employees are often entitled to a transition payment. However, expats may face additional challenges. More information about transition payments can be found on the website of the Dutch government.
Residence and work permits: What happens after job loss?
For expats, the residence permit is linked to their work in the Netherlands. A reorganization and subsequent dismissal can therefore have serious consequences:
Link between job and residence status: For many expats, their residence status depends on their job, often with a specific employer. If this job expires, the basis of their residence permit expires as well. Expats usually do not have much time to find a new job. Without new work, the residence permit in the Netherlands can be terminated. Read more about residence permits at the IND.
The 30% scheme
The 30% ruling is a tax benefit that expats can receive under certain conditions. This is an attractive scheme for expats. The employer may then reimburse 30% of the gross salary tax-free. The scheme has been tightened since 1 January 2024. For more information, see the 30% scheme on Rijksoverheid.nl.
Conditions to maintain the benefit: The 30% scheme is linked to the employer. If an expat finds a new job within three months with an employer who also wants to apply the scheme, the scheme can in some cases be continued. Information about the 30% scheme can be found at the Tax Authorities.
End of tax benefit upon departure: If you as an expat do not find a new job, the 30% scheme will expire. This has financial consequences. Without this scheme, you will have to pay more tax.
Important Note: The 30% compensation does not count as insured wages for employee insurances, such as the Sickness Benefits Act (ZW), the WIA and the WW. This means that this compensation does not count as a basis for calculating benefits from these insurances.
Transition compensation for expats
In the Netherlands, employees are often entitled to a transition payment when dismissed by their employer. This also applies if you are an expat. The transition payment offers financial support after dismissal. The payment can be used, among other things, for retraining or finding a new job. For expats, this payment can also help with costs such as moving and relocation costs if they decide to leave the Netherlands after dismissal. More information about severance pay and dismissal law can be found at the Dutch government.
More uncertainties for expats
In addition to the loss of income, job loss also brings other uncertainties for expats. It is important to be prepared for the following steps:
Staying unemployed in the Netherlands: As an expat, you may be eligible for unemployment benefits. This depends on the duration of your work in the Netherlands and the type of contract. In the event of loss of your job, we advise you to apply for unemployment benefits one week before the end date of your employment. For more information, see the UWV website.
International considerations: Expats who do decide to leave the Netherlands may experience tax complications upon returning to their home country. This is especially true if they have taken advantage of tax benefits such as the 30% ruling.
Tips to be well prepared for a reorganization
- Make clear agreements with the employer: Discuss during a reorganization what the specific consequences are for you as an expat. For example, ask about the possibility of being paid for a certain period while you look for another job.
- Contact the IND and the Tax Authorities: Inquire about the rules regarding work and residence permits and the 30% scheme in the event of unemployment.
- Get assistance from our legal experts: If you have any doubts about your rights and options, consult a lawyer from De Unie. De Unie can assist you in this regard and advise you during negotiations regarding the termination of your employment contract and any financial compensation.
- Provide a financial safety net: For expats, the loss of the 30% ruling and the need to find a new job can put financial pressure on them. Create a financial buffer and keep a close eye on your spending.
Learn more!
Want to know more about the rights of expats in a reorganization? Our experts have collected some useful links for you.
- Am I entitled to benefits in the Netherlands if I become unemployed? (source: Rijksoverheid.nl)
- What are the consequences for the residence permit of the knowledge migrant if he changes position within the company or leaves the company? (source: ManagementSite)
What can Trade Union De Unie do for you?
De Unie offers expats in the Netherlands support with all your questions regarding work and income. Whether you need help with a reorganization or want to know your rights regarding the 30% scheme, De Unie is ready to assist you. Feel free to contact our Service Center for personal advice and discover what we can do for you.
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