Dutch tax 30% facility

30% facility for expatriates in the Netherlands

When an expat comes to the Netherlands to work, he/she might face additional costs also known as extraterritorial expenses. The employer can pay the expat 30% of his/her salary tax free to cover these costs. This facility is known as the 30% facility. Under this facility, the expat and the employer do not have to provide evidence of any expenses made.

Condition

The expat will be eligible for the 30%-facility (also known as the 30% ruling) if he/she comes from abroad and has specific expertise that is unavailable or scarce on the Dutch labour market. Application of the facility requires permission of the Tax and Customs Administration. To this end, the expat can make a joint request with the employer.

Extraterritorial expenses:

If the total extraterritorial expenses exceed the allowance paid under the 30% facility, there is a possibility to compensate the actual expenses. In that case, however, the expat will have to provide evidence of these extraterritorial expenses. If he/she can demonstrate that the expenses exceed the 30%, the expenses actually incurred can be compensated free of tax. In this connection, there is no time restriction for the compensation of double housing costs.

Examples of extraterritorial expenses include the following:

• Additional costs of living because prices in the Netherlands are higher than in the expat's country of origin. These involve additional costs of water, gas, electricity and meals, for instance;
• Costs of a familiarisation trip to the Netherlands, for the expat to find housing or a school for his/her children;
• Costs of applying for or converting official documents, such as residence permits, visas and driving licences;
• Double housing costs if the expat continues to live in the country of origin. These could be hotel expenses, for example;
• Additional (initial) housing costs;
• Travelling expenses to the expatriate's country of origin, e.g. for family visits or family reunification;
• Additional costs for the completion of the tax return, if this is more expensive than having the tax return completed by a comparable tax consultant in the country of origin of the expatriates;
• Costs of a Dutch course, both for the expat and for the family members residing with him/her;
• Additional (non-business) call charges for telephone calls to the expatriate’s country of origin.

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