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30% Tax Rule

The Netherlands’ tax authority allows employers to provide international employees in the Netherlands a tax-free compensation for the extra expenses incurred by working outside their home country (the so-called extraterritorial costs). This can be done by reimbursing actual extraterritorial costs.

The Tax Office has a list of expenses that are eligible as extraterritorial costs. It is also possible to opt for a flat-rate method through the ‘30% tax facility’. This means that a fixed allowance of up to 30% of an expatriate’s salary can be paid tax-free.

In short, the tax facility means that 30% of their salary is paid tax-free. It aims to make the Netherlands financially attractive as a place to live for talented foreign employees.

Eligibility
You are eligible for the 30% facility, if you meet a number of conditions:

  • You were recruited outside of the Netherlands or seconded from a country other than the Netherlands to work in the Netherlands.
  • You have an employment relationship.
  • You have specific expertise that is not or is only barely available on the Dutch employment market.
  • In the 24 months prior to your 1st day of work in the Netherlands you lived 150 kilometres from the Dutch border. However, there are certain exceptions to the 24-month term and for people with a PhD.

How to apply?
If you would like to apply for the 30% facility, you should submit a joint request with your employer, to the tax authorities. The Dutch tax authorities provide more information on this facility.

Source EURAXESS

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