ET costs are costs that an employee would not have incurred if he/she remained working in his/her home country. Regular business expenses are not to be considered ET costs and can be reimbursed in accordance with Dutch wage tax rules.

The employer can decide to reimburse the real ET costs. This can be done if the costs are higher than the 30% allowance or when the 30% ruling is not granted. Based on the definition of ET costs, it may be difficult to determine which expenses qualify as ET costs. The Dutch Ministry issued a list with costs which are to be considered ET costs under certain conditions and which not.

• Cost of living allowance for the extra/higher costs in the Netherlands; can be reimbursed tax free as extraterritorial costs
• Foreign service premium/expat allowance/overseas allowance: will be taxed as normal salary
• Relocation expenses/ moving allowance: tax free up to a certain level under the normal rules
• Househunting/ acquaintance trip: can be reimbursed tax free as normal costs or as extraterritorial costs depending
• Cost for permits: costs for residence permit application can be reimbursed tax free as extra territorial costs, costs for work permits can be reimbursed tax free as normal labour costs
• Storage expenses: if the furniture will be moved to the Netherlands then these costs fall under the normal rules for the labour costs otherwise they can be reimbursed as extraterritorial costs
• Reimbursement for losses (for example on sale or property or car) will be taxed as normal salary
• Free accommodation/ housing: if a property is kept in the home country then the extra cost in the Netherlands can be reimbursed as extraterritorial cost, otherwise it will be taxed as normal salary but under specific rules
• Reimbursement for expenses for the purchase of a home/brokers fee: will be taxed as normal salary
• Utilities: it may be possible to determine these costs as extraterritorial expenses
• Home leave/ travel costs: travel costs for travel between The Netherlands and the home country are treated as extraterritorial costs
• Cost of a tax advisor: costs of Dutch tax preparation can be reimbursed as extraterritorial costs
• Tax-equalization: will be taxed as normal salary
• Language courses: can be reimbursed tax free as extraterritorial costs
• Telephone costs: tax free up to a certain level under the normal rules; the part which sees to the extra costs for phone calls to the home country can be determined as extraterritorial costs
• Food: tax free up to a certain level under the normal rules.