30% ruling

Employees who are seconded to another country or come to work in the Netherlands from another country are known as extraterritorial employees. If these employees meet certain conditions, they are eligible for a special expense allowance scheme: the 30% facility.

Under this facility, you may provide approximately 30% of the wages as an allowance for the additional costs of your employee’s temporary stay in the Netherlands. This allowance is tax-free.

This involves 30% of the wages from present employment, including the allowance itself. This allowance is tax-free.


The allowance is calculated as follows:

The wages excluding the allowance amount to € 40,000. The maximum tax-free allowance for extraterritorial expenses will then be 30/70 x € 40,000 = € 17,143

This is subject to the condition that the employee is not entitled to double tax relief in respect of those taxable wages. In other words, these wages must be fully taxable in the Netherlands.

We can help you with the application for this ruling and we can also assist you if you run into problems with the tax office regarding your application or your re-evaluation for this ruling.

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Quotation 30% ruling

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General information about the 30% ruling 

Content of the facility

If your employee is eligible for the 30% facility, he is provided three benefits:

  1. you may pay the employee tax free allowances up to 30% of his present employment income for extraterritorial expenses, without the need to submit further evidence (invoices, bills etc.)
  2. you may pay the employee a tax free allowance to cover the cost of children of the employee for certain international schools. It concerns school fees for an international school or for the international department of an ordinary school if:
  • the curriculum at the school (department) is based on a foreign system;
  • the school (department) is in principle only open to children of seconded employees
  1. if the employee becomes a tax resident of the Netherlands he may, upon request, be considered as a non-resident taxpayer of the Netherlands for certain items of income (‘partial non-resident status’). If required we can send you further information about this subject.


Employees from abroad

If you recruit an employee from abroad, or if this employee is seconded to you from outside the Netherlands, an incoming employee is at issue. If this employee has expertise that is unavailable or scarce on the Dutch labour market, the 30% facility for incoming employees will apply.

Scarcity, specific expertise

In order to qualify for the 30% facility, the incoming employee should have expertise that is unavailable or scarce on the Dutch labour market. In assessing whether this is the case, the Dutch Tax Authority takes the following factors into account:

  • the employee’s level of education;
  • the employee’s relevant experience;
  • the remuneration level of the position in the Netherlands in relation to the remuneration level in the employee’s country of origin.


Highly skilled migrants

 If there is a work permit in the Netherlands as a highly skilled migrant, than the Dutch tax authorities consider this approval sufficient to regard this person to have a scarcity.

 Seconded to the Netherlands by an international group

If an employee is seconded to the Netherlands by an international group, this may involve scarce, specific expertise without the above factors having to be assessed. In that case, the employee should fulfil the following 3 requirements:

  1. the employee has been seconded to the Netherlands as part of a rotation scheme within an international group.
  2. the employee holds a middle or senior management position within this group.
  3. the employee has at least two and a half years’ experience within this group.


Paying the allowance in addition to the wages

The tax-free allowance should be paid separately from the wages. To this end, the agreed wages may be reduced in accordance with employment law. An administrative division of the wages into a wage component and a tax-free allowance component for extraterritorial expenses is not permitted.

We can provide you the text for this, which can be included in or added to the employment contract.


Application of the 30% facility for incoming employees requires the permission of the Dutch Tax Authority. You and the incoming employee will have to file a joint request to this end.

The joint request for application of the facility should be filed within 4 months after the start of the incoming employee’s employment. If the request is made after this period, the term will be reduced.

If the request has been made within four months of the start of the employee’s employment, the facility may be applied from the first day of employment. If the request was made later, the facility will be applied from the first day of the month following that in which the request was made. The commencement date of the facility will be specified in the ruling from the Dutch Tax Authority.

The Dutch Tax Authority will decide on the request by a ruling open to objection. This means that you can file an objection to the decision.

Of course we are gladly to help you with such request for you and your employee(s).


Term and re-evaluation

The 30% facility for employees from abroad has a maximum term of ten years. The term starts on the first working day. This term may be reduced in case the employee already worked or stayed in the Netherlands before. In that case the maximum term will be reduced by the period in which he stayed in the Netherlands.

Employee’s expertise is no longer scarce

After five years, the Dutch Tax Authority may ask the employer to demonstrate that this employee still fulfils the requirement of specific expertise. It is possible that the employee’s expertise is no longer as scarce on the Dutch labour market as when he was hired or seconded from abroad.

You as employer can judge for yourself whether the incoming employee’s expertise is still scarce on the Dutch labour market, or have this assessed by the Dutch Tax Authority. To this end, you can submit a request to the Dutch Tax Authority /Limburg/Department of International Affairs.

If it appears that the employee no longer fulfils the condition of scarce, specific expertise, the facility will end with effect from the 61st month. If the employee still meets the conditions, the facility will apply until the end of the term (with a maximum of ten years).

Extraterritorial expenses

You can pay the tax-free allowance to cover extraterritorial expenses. If the 30% facility, there is a possibility to reimburse the actual expenses. In that case, however, you will have to provide evidence for these extraterritorial expenses. If you can demonstrate that the expenses exceed 30%, the expenses actually incurred can be reimbursed free of tax. In this connection, there is no time restriction for the reimbursement of double housing costs.

The following costs qualify as extraterritorial expenses:

  • additional costs of living because prices in the country of work are higher than those in the country of origin. Examples include the additional costs of meals, gas, water and electricity;
  • costs of a familiarisation trip to the new country of work, whether or not with the family, for instance in order to find housing or a school;
  • costs of applying for converting official personal documents, such as residence permits, visas an driving licences;
  • costs of medical examinations and vaccination required for the stay in the new country of work;
  • double housing costs if the employee continues to live in the country of origin. These could be hotel expenses, for example;
  • additional (initial) housing costs;
  • storage costs for the household effects that are not moved to the new country of work;
  • costs of travelling to the country of origin, for instance for family visits or family reunification;
  • additional costs for the completion of a tax return, if this is more expensive than having the tax return completed by a comparable tax consultant in the country of origin;
  • costs of a training course in order to learn the language of the new country of work, both for the employee and for the family members residing with him;
  • additional (non-business) call charges for telephone calls to the country of origin.

Please note that in case the 30% facility has been applied, you are not allowed to reimburse the above mentioned extraterritorial expenses separately.


No extraterritorial expenses

The following items do not  qualify as extraterritorial expenses and therefore cannot be reimbursed free of tax:

  • secondment allowances, bonuses and comparable allowances (foreign service premium, expat allowance, overseas allowance);
  • capital losses;
  • purchase and selling costs of a property (reimbursement of house purchase costs, broker’s fee);
  • compensation for higher tax rates in the country of work (tax equalisation).

The following costs, amongst others, may also be reimbursed free of tax if certain conditions are met:

  • costs of a familiarisation visit by the employee to the business in the country of work;
  • commuting expenses;
  • telephone line rental costs;
  • costs of business meals.

These costs can be reimbursed next to applying the 30% facility.


end faq


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