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Which costs can be considered to be extra territorial costs?


The State Secretary of Finance has announced in February 2004 which costs can be reimbursed tax free as extra territorial costs and which costs will be treated as normal labour costs. If the 30% ruling is granted and included in the payroll administration then the extra territorial costs can't be reimbursed again separately, but the normal labour costs can (under certain conditions).

  1. cost of living allowance for the extra/higher costs in the Netherlands: can be reimbursed tax free as extra territorial cost
  2. foreign service premium / expat allowance / overseas allowance: will be taxed as normal salary
  3. relocation expenses / moving allowance: tax free up to a certain level under the normal rules
  4. househunting / acquintance trip: can be reimbursed tax free as normal costs or extra territorial costs depending on the situation
  5. costs of permits: costs of residence permits can be reimbursed tax free as extra territorial costs, costs of work permits can be reimbursed tax free as normal labourcosts
  6. storage expenses: if the furniture will be moved to the Netherlands then these costs fall under the normal rules for the labourcosts otherwise they can be reimbursed as extra terrotorial costs
  7. Losses (for example on sale of property or car): will be taxed as normal salary
  8. free accomodation / housing: if a property is kept in the home country then the extra costs in the Netherlands can be reimbursed as extra territorial costs, otherwise it will be taxed as normal salary but under specific rules
  9. reimbursement expenses purchase house / brokers fee: will be taxed as normal salary
  10. utilities: it may be possible to treat these costs as extra territorial costs, see 1
  11. home-leave / travel costs: travel costs for travel between the Netherlands and the home country are treated as extra territorial costs
  12. costs of a tax advisor: costs for the Dutch tax return can be reimbursed as extra territorial costs
  13. tax-equalization: will be taxed as normal salary
  14. language courses: can be reimbursed tax free as extra territorial cost
  15. Phonecosts: tax free up to a certain level under the normal rules, part which sees on the extra costs for calls to the home country can be treated as extra territorial costs
  16. Food: tax free up to a certain level under the normal rules
 
You can find more information on www.expatax.nl/etcosts.

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Comments (2)
Comment by maxim on Thu, Feb 20th, 2014 at 2:22 PM
hi, can you estimate costs of your tax consulting fees for my 2 year contract in nl? i need help with tax back claims, and extra territorial costs claims from dutch employer, any other relevant claims, e.g. pension fund etc.
Comment by arjan enneman on Sun, Mar 2nd, 2014 at 9:51 PM
@maxim Extra territorial costs can be reimbursed tax free, but it
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