The new Dutch government plans to reduce the tax break for expats known as the 30% ruling, according to the coalition agreement published on Tuesday.

In the section on ‘a competitive place to do business’, the four-party alliance say they will ‘limit the tax advantages for expats’, before going on to explain that international workers will only be able to benefit from the ruling for five years, rather than eight as at present.

A report for the finance ministry published this June said that the ruling is too generous and its provisions could be reduced, while recognising its importance to attract top talents.

Some 60,000 people currently claim the tax break, which effectively means they do not pay tax on the first 30% of their salary. This, the report concludes, cost the treasury some €755m in 2015 and is set to cost €902 in 2017.

To claim the ruling, expats have to earn nearly €53,000 a year (or €37,000 after the 30% has been deducted) and must have lived at least 150 kilometres from a border with the Netherlands, effectively ruling out Germans and Belgians.

The report said Indian nationals are the most likely to use the ruling, followed by British, American and Italian expats.

The coalition agreement does not give any further details about how the new government plans to introduce the changes or when they will take place. DutchNews.nl has asked the finance ministry for comment.