30% Facility

When an employee, recruited from outside the Netherlands, has specific expertise that is scarce or unavailable on the Dutch labour market, the employer may reimburse certain extraterritorial expenses tax-free. These are any reasonable additional costs incurred in relation to a foreign worker's temporary stay outside the employee’s country of origin.

The application of the 30% facility is subject to the following conditions:

• The employee concerned must have been recruited from outside the Netherlands and must have specific expertise, which is scarce or unavailable on the Dutch labour market (employee assigned to the Netherlands).
• The employer (the 'withholding agent', i.e. the person responsible for deducting income tax) and the employee must make a joint request to the Inspector for application of the arrangements.
• In determining whether the first condition is satisfied, the Dutch Tax Office (Belastingdienst) will, where relevant, consider the following factors:
  1. the level of education attained by the employee
  2. the employee's relevant experience for the position
  3. the remuneration for the position in the Netherlands in relation to the remuneration in the employee's country of origin.

The employer must obtain permission from the Dutch Tax Office. To obtain this permission the employer and employee must submit a joint request to the Tax Office in Heerlen (Belastingdienst/Limburg/kantoor Buitenland, Postbus 4486, 6401 CZ Heerlen). An Inspector from this department will make the final decision. The Inspector's decision regarding the request is open to query.

More information on this ruling can be found here.

Tax Information Line for Non-resident Tax Issues is open Monday to Thursday from 8 a.m. until 8 p.m. and on Friday from 8 a.m. to 5 p.m.