Den Bosch, The Netherlands

Hiring from abroad in the Netherlands

By Carijn van Helvoirt–Franssen and Roel Jansen, EJP Financial Astronauts

When expats come to The Netherlands to work and live, they often have double costs – the so-called extraterritorial costs. Examples of these costs are housing costs, insurance, etc.

Dutch wage tax law allows employers to reimburse their employees for these costs in the first five years of their stay in the Netherlands, tax free. There are two ways of reimbursing the extraterritorial costs:

  1. reimbursement of actual costs; and
  2. the so-called 30% facility.

Reimbursement of actual costs

The main rule is that actual extraterritorial costs can be reimbursed tax free. In order to reimburse the actual costs tax free, evidence of these double costs must be provided, and, in case of a wage tax audit, should be shared with the Dutch tax authorities. This burden of proof leads to an administrative burden for the employer.

30% facility

An alternative to the reimbursement of actual costs is the so called 30% facility. By applying the 30% facility, employees can receive 30% of their gross salary tax free as compensation for their extraterritorial costs. However, since this is a beneficial provision, there are some stringent conditions that the employee must meet. Briefly, the following conditions apply:

  1. the employee earns a gross salary of at least EUR 39,647;
  2. was recruited from outside of the Netherlands; and
  3. lives more than 150 kilometres (as the crow flies) from the Dutch border.

Of course, there are nuances and exceptions to these conditions. The main advantage of the 30% facility is a strongly reduced administrative burden to the employer. The employer and employee apply for the 30% facility together and provide proof that the requirements have been met. Thereafter, for a maximum period of five years, the employee can receive 30% of their gross salary tax free.

Summary

It is beneficial for eligible employees to apply for the 30% facility. Thus, if you intend to have staff recruited from abroad working for your company in the Netherlands


Carijn van Helvoirt-Franssen

Carijn van Helvoirt-Franssen

GGI member firm
EJP Accountants & Adviseurs
Auditing & Accounting, Corporate Finance, Tax
‘s-Hertogenbosch, The Netherlands
T: +31 6 53 89 33 60
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: ejp.nl

EJP Accountants & Adviseurs are auditors, advisers, and challengers. Their 40 auditors and international tax lawyers have a wide range of expertise. Their main fields of expertise are Dutch corporate and personal income tax, international taxation, Dutch royalty, interest and dividend withholding tax, estate planning, and wage tax. They have an AFM license to perform audits for the larger midsize companies.

Carijn van Helvoirt-Franssen holds a Masters in Fiscal Economics from Tilburg University and has been part of the EJP team since 2020. As an allround tax specialist, she focuses on providing tax advice to companies and their directors and major shareholders.
Roel Jansen

Roel Jansen

GGI member firm
EJP Accountants & Adviseurs
Auditing & Accounting, Corporate Finance, Tax
‘s-Hertogenbosch, The Netherlands
T: +31 73 850 74 37
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: ejp.nl

Roel Jansen completed a Master’s degree in Fiscal Economics at Tilburg University in 2021 and has been part of the EJP team since 2019. As an all-round tax specialist, he mainly focuses on international tax and inheritance and gift tax.


Published: International Taxation Newsletter, No. 16, Spring 2022 l Photo: PaulvSchijndel - stock.adobe.com

Ggi Logo 150x109px

GGI Global Alliance AG

Sihlbruggstrasse 140
6340 Baar
Switzerland

Contact

T: +41 41 7252500
F: +41 41 7252501
This email address is being protected from spambots. You need JavaScript enabled to view it.
www.ggi.com