The Dutch 30% ruling for expenses
Congratulations! You have arrived in the Netherlands and have been granted the 30% ruling. The 30% ruling is meant for expats like you as compensation for expenses such as housing and other expenses that you would not have if you had stayed in your home country. Now, if you are wondering whether there is anything further you need to know—why, yes, there is! Outlined below are the provisions for applying the ruling to expenses. Please read on—it can make a substantial difference to you.
Of course if you have any further questions, please reach out to Payingit International and we can tell you all about it. We have the current information and we love this stuff.
Expenses for an employee with a 30% ruling
There are two things to know: some reimbursed expenses are taxable and some are not. Here’s the explanation.
Under the terms of the 30% ruling, the following costs can be reimbursed tax free in addition to the 30% ruling:
- Moving costs for household goods including temporary storage;
- Costs for “get acquainted” visit by the employee to the company in the host country;
- Costs for applying or extending a work permit;
- School fees for an international school or a Dutch school with an international department.
Expenses that are NOT tax free if they are reimbursed in addition to the 30% ruling
If your agreement with your employer is that you will be reimbursed for other costs in addition to receiving the 30% ruling, these items will most likely be taxable and must be included in the Dutch payroll.
Examples of these are:
- Utility costs and other cost-of-living allowances (COLA);
- Costs for a trip to the host country (for example, to look for housing or schools)
- Costs for official documents such as residence permits, visas, and driver’s licenses;
- Costs for required medical examinations and vaccinations;
- Double housing costs for employees that keep a residence in their home country but also have hotel costs in the host country;
- The housing costs for the first weeks or months;
- Storage costs for any part of the inventory that will not be moved to the host country;
- Home leave costs for travel to the home country for family visits;
- Extra costs for the preparation of annual income tax returns;
- Language courses for the employee and his/her family to learn the language in the host country;
- Extra (private) phone costs for calls to the home country;
- Costs for the application of a social security certificate such as a A1 or E101;
- Allowances related to the assignment (foreign service premium, expat allowance, overseas allowance);
- Costs related to buying or selling a house (such as broker fees);
- Compensation for higher tax rates in the host country (tax equalization).
Please ensure that it is clear between you and your employer if these expenses will be reimbursed as a gross amount (meaning you pay the taxes) or a “gross up amount” (meaning your employer pays the taxes). If you will be reimbursed for any of the items that are NOT tax free, it is important to be sure they have been included in the Dutch payroll administration. Unpleasant surprises later on are in no one’s interest. Check first!