The cabinet has finalised its 2025 spending plans and now the leaks have started, with Dutch media reporting good news on school meals, the 30% ruling and income tax.

The Telegraaf said on Friday afternoon that cuts to the 30% ruling, a tax break that some foreign workers can claim, will not be reduced as much as parliament wants. Instead of reducing the benefit over five years from 30% of salary to 10%, the break will now apply to 27% of salary and will not be cut further.

Money has also been earmarked to ensure the current free school meals system will remain in operation after the end of this year. Two years ago, one in six Dutch schools registered to receive free meals or financial support for pupils from poor backgrounds after the education ministry set aside €100 million to fund the project.

Ministers have also come up with a compensation scheme for the planned increase in value-added tax on school text books. The AD reported earlier that the tax hike, from 9% to 21% for the arts, culture, sports clubs and museums will go ahead.  

The higher rate of transfer tax which investors and small landlords pay when buying a house will also be cut from the current level of 10.4%, possibly to 8%, sources told the Telegraaf.

The budget for policing and the defence ministry will also be increased.

Despite planned cuts in civil servant numbers, as was agreed in the coalition deal, there will be no cuts in embassies and consulates abroad. ‘We see maintaining the network as an investment in the Netherlands,’ a source told RTL.

In addition, the Telegraaf said the cabinet is meeting opposition party wishes to reduce planned cuts in the income tax break for donations and is “willing” to talk about an early retirement scheme for people in physically taxing jobs.   

The Telegraaf said earlier that the government will introduce a new lower income tax band, below the current level of 37%.

Balanced budget

Prime minister Dick Schoof earlier described the budget as “well-balanced” and that everyone would benefit financially – with spending power up around 1%, according to RTL. Finance minister Eelco Heinen said that the setbacks – such as the asset tax ruling – had been worked in.

Schoof and Heinen had been in talks with the leaders of the four parties until 4 am to finalise the details.

The budget has now been sent to the Council of State for its assessment and will be formally presented on September 17.