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The 30% ruling is a tax incentive for employees who are recruited from abroad who bring specific skills to the Netherlands. Such employees are considered “extraterritorial” employees. Under this ruling, the employer may provide 30% of the wages as an allowance including compensation for the additional extraterritorial costs of the employee’s temporary stay in the Netherlands. This allowance is tax-free and has a maximum term of eight years.
Examples of extraterritorial costs are:
Examples of non-extraterritorial costs are:
If an employer recruits an employee from abroad, this person is considered an incoming employee. If this employee has expertise that is unavailable or scarce on the Dutch labor market, and has lived more than 150 km from the Dutch border for the past 24 months, the 30% facility for incoming employees will apply.
In assessing whether the above is the case, the Tax and Customs Administration takes the following factors into account:
Application of the 30% facility for incoming employees requires the permission of the Tax and Customs Administration. The employer and the incoming employee will have to file a joint request to this end. The application is called “Verzoek loonheffingen 30%-regeling 2014” (Application for the 30% facility to be applied), and it is only available in Dutch.
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:
The 30% facility for employees from abroad has a maximum term of eight years. The term starts on the first working day. This term may be reduced. This happens in the following cases:
If an employee changes jobs, the 30% facility may be continued as usual. This will then require a joint request from the employee and his or her new employer. In this context, the period between the old and the new employment must not exceed three months. In this request, the new employer must demonstrate that the employee still fulfils the condition of scare, specific expertise.