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Written by:
Willemijn Houter


Interim evaluation of 30% ruling involves “150 kilometre criterion” being taken account of

The 30% ruling provides for a special regime aimed at Dutch-based expatriate workers who boast particular skills that are in short supply in the domestic labour market, by rendering 30% of their overall gross remuneration tax-exempt in compensation of their additional accommodation costs owing to their having to live abroad. To this end the employer and employee jointly file a petition with the tax inspector aimed at the employee being admitted to the 30% regime (with admission understandably depending on particular criteria being satisfied). The 30% regime used to be subject to a maximum ten-year term, with the Payroll Tax Implementation Decree containing a clause providing for the term of a pre-existing ruling being curtailed where the employee in question had been found no longer to boast skills that were regarded as scarce in the Dutch labour market. The tax inspector was authorised at the halfway stage to request the employer’s corroboration of the employee’s continued compliance with the criteria. Although this clause was scrapped in 2011, owing to particular transitional provisions it was still applicable to those who by year-end 2011 had not yet completed their initial five-year term (of the total of ten years) under the 30% ruling.

Eligibility for admission to the 30% regime has been contingent, since the first of January 2012, upon the expatriate worker in question prior to moving to the Netherlands having had his or her abode at a distance of more than 150 kilometres from the Dutch border. This criterion invariably applies including in the event of a pre-existing 30% ruling coming up for interim evaluation. The upshot of this is that the continuation of the 30% ruling will be barred for rulings predating 2012 involving expatriate workers who prior to their move to the Netherlands lived within a distance of 150 kilometres from the Dutch border even though the “150 kilometre criterion” as such did not yet apply at the time the 30% ruling was originally issued. This has now been confirmed by the Supreme Court of the Netherlands in its ruling to the relevant effect.

Dutch version: 150-kilometercriterium ook bij tussentijdse beoordeling 30%-regeling

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