Have you got the tax-free 30% ruling or are you an expat without, but you have not been that long in the Netherlands yet? The following may be interesting for you to know.
Extra-territorial costs (ET costs) are extra expenses incurred as a consequence of your temporary stay outside the country of origin in respect of your employment in the Netherlands. Your employer is allowed to reimburse ET costs to you tax-free. But what is considered to be included in ET costs? A few examples:
- double housing costs in respect of continued payments for a house in your home country and rental costs for temporary housing facility in the Netherlands;
- costs for home leave to the country of origin, travel tickets;
- extra costs for living in the Netherlands compared to the standards in the country of origin;
- costs of the introductory trip to the Netherlands to look for school and house facilities;
- costs for the application of formalities, such as residence permits, drivers license;
- costs for the first housing in the Netherlands;
- costs of storage household goods in the home country;
- costs of a Dutch language training.
If the 30% ruling is embedded in the payroll, your employer cannot reimburse the actual incurred ET costs again tax free. You and your employer can consider to have the actual ET costs reimbursed tax-free instead of using the 30% ruling; this can be attractive if the ET costs exceed the maximum benefit of the 30% ruling. Be aware of some pitfalls and conditions here, take timely action and carefully estimate and calculate your annual ET costs. After that it is a game of employment conditions, personal attention and sophisticated company policy and cost savings.
Author: Leo Oudshoorn – Wecountancy Expat Services
