Who Is it for?
The main condition is that the eligible expat must be an employee hired or transferred from abroad to work in the Netherlands. Also, “from abroad” is further specified as not having lived within 150km distance from the Dutch border for two years prior to starting employment in the Netherlands.
Because the 30% facility benefit is aimed at candidates with skillsets that are rare in the Dutch market, prior to 2012, expats had to prove that they possessed required education and expertise. Since 2012, there is a minimum salary requirement, which effectively replaced the obligation to prove desired expertise. The required salary changes every year. Minimum required taxable salary (70%) for year 2016 is € 36,889 (which is gross € 52,699).For employees under the age of 30 who have obtained a master degree at a foreign university, the minimum required taxable salary (70%) is € 28,041(which is gross € 40,059).
How Does it Work?
Both the employer and the employee must sign an appendix to the employment agreement. Since the 30% facility can have various unintended effects, the tax office (Belastingdienst) wants to make sure that both the employer and the employee are aware of these consequences.
Ideally, your employer would submit the application on your behalf to the tax office before the start of your employment. Alternatively, if the application is filed within 4 months from the start of your employment, the decision will be retroactive so that you will not lose the benefit from previous months. However, if the application is filed more than 4 months since the beginning of your employment, the 30% facility benefit will apply as of the first day of the month following the month in which the request was made.
Rather than splitting your gross salary in two parts of 70% taxable and 30% non-taxable, your whole gross salary will be reduced to 70% of its original sum, and duly taxed. On top of your new lower salary, your employer can pay you a tax-free remuneration of 30% of your original salary. The tricky part is that your employer is not obliged to forward this remuneration to you. In some cases, the employer can decide to keep part, or the whole amount of it (for example if the employer has paid, or is paying some of the cost of your relocation, like housing). Another thing to keep in mind is that along with your gross salary, all the rights based on it (like pension and social security) will be reduced too.
If the tax office deems you eligible for the 30% facility, you can take advantage of this scheme for up to 8 years, counting from the first day of your employment, and can even change employers in the course of these 8 years, provided the time gap between the two employments is no longer than 3 months.
Veronika Bacova