Definition of 'expatriate employee'
In principle, the Tax and Customs Administration understands 'expatriate employees' as employees who have come to the Netherlands to work. These also include inhabitants of the BES Islands, Aruba, Curaçao and Sint Maarten. However, a limitation is applicable to employees originating from the regions along the Dutch borders.
Limitation for employees originating from the regions along the Dutch borders
The 30%-facility is available solely for employees who have lived at a distance of more than 150 kilometres, in a straight line, from the Dutch border for more than 16 months in the 24-month period prior to their first working day in the Netherlands. Consequently, the 30%-facility is not available for employees from Belgium or Luxembourg, or for employees from Northern France, large parts of Germany and a small part of the United Kingdom.
Exceptions to the limitation
The limitation is not applicable, with retroactive effect from 1 January 2012, to employees who originate from regions along the Dutch borders and who meet the following 3 conditions:
- The employee has worked previously in the Netherlands and, following a stay outside the Netherlands, has returned to work in the Netherlands on a date on which the earlier period of work in the Netherlands began no more than 8 years ago.
- The employee has lived at a distance of more than 150 kilometres, in a straight line, from the Dutch border for more than 16 months in the 24-month period prior to the first working day in the Netherlands.
- During this prior working period, the employee was subject to a decision for the 30%-facility. If there was no decision, he may argue convincingly that he met the conditions for the 30%-facility applicable at that time.
An exception is applicable to employees with a PhD who were awarded their degree within one year prior to coming to work for you in the Netherlands. When a PhD graduate complies meets the following conditions then the Tax and Customs Administration will, nevertheless, deem the graduate to be an expatriate employee:
- During the period of the studies for the PhD and the period between the award of the degree and the commencement of employment in the Netherlands the employee lived in the Netherlands or within a radius of 150 kilometres from the Dutch border.
- The employee lived at a distance of more than 150 kilometres from the Dutch border for more than 16 months in the 24 months prior to the studies for the PhD in the Netherlands.
In the following situations, we consider a PhD graduate to be an expatriate employee as well:
- He performed doctoral research in the Netherlands and was also employed in the Netherlands apart from his doctoral research.
- Before he obtained his degree, you gave him an employment contract. Your condition for hiring him was, however, that he obtained his degree.
In these cases, the 30%-facility will only commence once the employee has been awarded his degree.