What is the 30% facility and how do I apply for it?
Employees coming to work in the Netherlands from abroad sometimes incur additional expenses. These expenses are referred to as extraterritorial costs and can include costs for (initial) housing, visa application, and/or medical examinations. As an employer, you are allowed to provide a tax-free reimbursement for extraterritorial costs that your employee can substantiate. The employee submits invoices for these expenses to you. You reimburse the employee for these costs and keep the invoices in your records as proof.
Tax-free allowence with the 30% ruling
Instead of reimbursing actual extraterritorial costs, you may, under certain conditions, make use of the so-called 30% ruling. You then provide a maximum of thirty percent of your employee's salary (including allowance) tax-free as compensation for extraterritorial costs. You do not need to prove that your employee has actually incurred these costs.
Conditions for the 30% ruling
You may only apply the 30% rule under the following strict and cumulative conditions:
- Your employee has been recruited from abroad and works for you as an employee.
- In the two years before the first working day in the Netherlands, your employee has lived outside the Netherlands for more than sixteen months, and this residence was also more than one hundred and fifty kilometers from the Dutch border.
- Your employee possesses specific expertise that is not readily available in the Dutch labor market. This expertise is deemed "present" if your employee in the Netherlands has a minimum salary of € 46.107 (in 2024, excluding the tax-free allowance). For employees under thirty with a master's degree and scientific researchers, more lenient criteria apply.
- You have a valid decision from the Tax Administration (Belastingdienst) for the application of the 30% ruling.
- The 30% rule can be applied up to the maximum of the WNT norm (Balkenende norm). In 2024, this amount will be €233,000.
30% ruling
Until 1 January 2024, an employer could provide up to 30% of the salary tax-free for a period of 60 months under certain conditions. Since the beginning of this year, the 30% rule builds off after every 20 months. For the first 20 months, you can apply the 30% ruling up to a maximum of 30% of the fiscal salary. For the next 20 months, you can apply the scheme up to a maximum of 20% of the taxable salary. In the last 20 months, it can be applied up to a maximum of 10% of the taxable salary.
During Prinsjesdag 2024, it was announced that this earlier retrenchment of the 30% rule will be reversed. The second memorandum of amendment to the 2025 Tax Plan confirmed this change. For now the tax-free allowance will remain 30% of the employee’s salary. From 1 January 2027, a new flat rate of 27% for 60 months will apply. However, the salary standard will be increased. As of 1 January 2027, it will be increased to € 50,436. This amount will be indexed every year thereafter.
Transitional right
Transitional law applies to employees who were already employed by their employer before 2024. If the employer applied the 30% rule to the employee's salary in the last pay period of 2023, the current conditions of the 30% rule continue to apply. This of course depends on the duration of the scheme and provided the other conditions for application of the scheme are still met.
More information?
Do you wish to receive more information? Please contact Clea Cremers, global mobility specialist - tax, on telephone number +31(0)77-3217715 or send her an e-mail.
