Content of the 30%-facility
Pursuant to the 30%-facility you may untaxed reimburse specific employees, without furnishing additional proof, a maximum of 30% of the wages inclusive of the reimbursement (in the form of a specific exemption, see Allowances, benefits in kind and provisions) for the extraterritorial costs. Instead, you may also give no more than 30/70 of the wages excluding the reimbursement as untaxed reimbursement. You will then need to take account of the expertise requirement. Here, wages are considered to be wages from present employment for which you file payroll tax returns.
Example 1
The wages inclusive of the reimbursement are € 60,000. The tax free reimbursement of the extraterritorial costs is a maximum of 30% x € 60,000 = € 18,000.
Example 2
The wages inclusive of the reimbursement are € 43,000. As the wages exclusive of the reimbursement must be at least € 41,954 you can issue the employee a reimbursement of a maximum of € 43,000 - € 41,954 = € 1,046.
Example 3
The wages exclusive of the reimbursement are € 43,000. The tax free reimbursement of the extraterritorial costs is a maximum of 30/70 x € 43,000 = € 18,429.
When you issue reimbursements or provisions in excess of the maximum amount then the excess is wages for the purposes of payroll taxes.
When the actual costs incurred in reasonableness are in excess of 30/70 of the wages then you may also opt to issue the employee a tax free reimbursement of the actual costs. However, you will then need to furnish proof for the costs.
Other tax-free reimbursements and provisions
When you make use of the 30%-facility you may also issue the employee the following tax free reimbursements or provisions (specific exemption):
- the costs incurred in the removal, temporary storage and transfer of the household effects
- the costs incurred in the employee's visit to the Netherlands to become acquainted with the company
- the school fees for an international school or international department of a regular school
This is an issue when:- the education programme at the relevant school or school department is based on a foreign system
- the school or department is intended especially for children of seconded employees
Please note!
The 30%-facility is also applicable to the employed persons' insurance contributions. When the employee is insured for the employed persons' insurance schemes in the Netherlands you do not need to calculate the employed persons' insurance contributions on the specific exemption pursuant to the 30%-facility.
More information about the 30%-facility can be obtained by calling the Tax Information Line.
Payroll records and payroll tax returns
Your administrative obligations for employees who make use of the 30%-facility are identical to those for your other employees. However, when you apply the 30%-facility you will need to take account of the reimbursements or provisions you have paid or provided alongside the 30%-facility as you are not permitted to reimburse or provide the actual extraterritorial costs incurred alongside the application of the 30%-facility.
