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November 13, 2023

The Dutch House of Representatives further restricts Dutch 30%-facility

On 26 October 2023, during discussion of the 2024 Tax Plan, the Dutch House of Representatives adopted two amendments for a further reduction of the 30%-facility. These latest changes will become effective from 1 January 2024 and 1 January 2025 respectively and will be of interest to all employers who employ qualifying employees. The Dutch Senate is scheduled to discuss the package of measures on 11 and 12 December 2023, followed by a vote on 19 December 2023. Nevertheless, these changes — especially because of the transitional law — already deserve attention. Currently, the 30%-facility offers the possibility to pay incoming employees a maximum of 30% of their taxable salary in the Netherlands tax-free, as a notional compensation for the extra costs arising from working outside their country of origin. The 30%-facility has a maximum term of 5 years and will be capped from 1 January 2024 (subject to transitional law) by being allowed to apply it up to a maximum of the so-called 'Balkenendenorm’ (€ 233,000 in 2024).

A Tax Alert prepared by EY's People Advisory Services group, and attached below, provides additional details.


Full text of Tax Alert