Extraterritorial Costs

If your employee incurs expenses during the performance of his/her employment, you may reimburse him for particular costs free of tax. Among the expenses that employees may incur are the so-called extraterritorial costs. These are additional costs that you incur in connection with the fact that you have been seconded to another country or have come to work in the Netherlands from another country.


In this case, however, you will have to provide evidence for these extraterritorial costs.


The following costs qualify as extraterritorial costs:

  • Additional costs of living incurred because prices in the country of work are higher than those in the country of origin, including: meals, gas, water and electricity.
  • Costs of a familiarisation trip to the new country of work, whether or not with the family. For instance, in order to find housing or a school.
  • Costs of applying for or converting official personal documents, such as residence permits, visas and driver's licenses.
  • Costs of medical examinations and vaccinations required for the stay in the new country of work.
  • Double housing costs if the employee continues to live in the country of origin. For example, additional (initial) housing costs, and storage costs for the household effects that are not moved to the new country of work.
    Please note: There is no time restriction for the reimbursement of double housing costs. 
  • Costs of travelling to the country of origin, for instance, for family visits or family reunification.
  • Additional costs for the completion of a tax return, if it is more expensive than having the tax return completed by a comparable tax consultant in the country of origin.
  • Costs of a training course in order to learn the language of the new country of work, both for the employee and for the family members residing with him/her.
  • Additional (non-business) call charges for telephone calls to the country of origin.


The following costs do not qualify as extraterritorial costs:

  • Secondment allowances
  • Bonuses and comparable allowances (foreign service premium, expat allowance, overseas allowance)
  • Capital losses
  • Purchase and selling costs of a property (reimbursement of house purchase costs, broker's fee).
  • Compensation for higher tax rates in the country of work (tax equalisation).


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