30% Tax Facility

THIS INFORMATION IS OUTDATED!!!

PER 1 JANUARY 2012 THE REGULATION HAS SEEN SOME IMPORTANT CHANGES.

THE NEW INFORMATION WILL SOON BE PUT ON THE WEBSITE.

Foreigners are assumed to have a higher cost of living than the locals. For example, they are disadvantaged when trying to find reasonably priced accommodation. These extra expenses are known as extraterritorial expenses and can be off-set by a special tax facility. Either the actual expenses can be reimbursed or a fixed allowance of 30% of the expatriate's salary can be paid tax-free. The latter option is known as the 30% tax facility.
Under this facility, there is no need to provide evidence of any expenses incurred. If approved by the tax administration your employer can pay you 30% of your wages, including the allowance, free of tax.  

Eligibility criteria 
Application procedure  
Consequences for social security, occupation pensions and holiday pay  
Extra advantages of 30% tax facility  
More information

Eligibility criteria

1. Employment contract
You need to be employed. If you do research on a stipend you are not eligible. 

2. Hired from outside the Netherlands
You need to be hired 'fresh' from abroad in order to apply for the 30% tax facility. If you were already residing in the Netherlands when you were hired, you are not eligible. There are two exemptions to this rule:
- foreign students in the Netherlands are not considered to live in the Netherlands, thus if you are hired after a study in the Netherlands, this eligibility criteria is still fulfilled.
- when you change employer and you used the 30% tax facility at your previous employer, than this criteria does not apply. You do need to hand in a new application.

3. You have specific expertise which is scarce in the Netherlands
Generally if you are a researcher and have 2.5 years of relevant work experience, you will fulfill this criteria. Relevant work experience can also be obtained in relevant research projects and trainee ships during your studies.

Application procedure

Within 4 months of the start of your employment you and your employer need to hand in a joint application for the 30% tax facility. You can use the 30% tax facility for a maximum of 10 years. After 5 years the Tax Office can at any moment decide to re-evaluate if you still fulfill the requirements (eligibility criteria). To be sure of your tax facility for the next 5 years you can ask the Tax Office to check if you still fulfill the eligibility criteria just before the first 5 years are passed. 

Download application form (from website Tax Office)

Consequences for social security, pension and holiday pay 

Generally employers put the 30% tax facility in practice by lowering the agreed salary to 70% and add the other 30% tax free on top of this lowered salary. It is important to realise that the lowered salary (the salary minus the 30% tax facility) is the basis on which:

1. you are insured for your employee insurances such as unemployment, accident at work and illness.
In other words, if you will become unemployed you have the right to 70% of 70% of your salary (namely 70% of your salary minus the 30% tax facility).

2. you are building up rights for your occupational pension. (more information)

3. your holiday pay is calculated (8% of your annual gross income).

Extra advantages of the 30% tax facility

Partial non-resident taxpayer status
If you are eligible for the 30% tax facility, you may also opt for partial non-resident taxpayer status. In that case, you will be regarded as a non-resident taxpayer for part of your income tax liability. This may result in a tax advantage.

Changing Driving Licence.
Another advantage of the 30% tax facility is that you (and your family members) can exchange your non-EU driving license without having to do a Dutch driving test.  

More information 

To find out more about the possibilities of this tax-deduction rule for you, contact your local HRM-person or contact the Tax Office:

Belastingdienst/Particulieren/Ondernemingen Buitenland
Postbus 2865
6401 DJ Heerlen
+31 (0)55 538 53 85
www.belastingdienst.nl