European court asked to assess Dutch 30% ruling changes

Revised rules for the 30% expat ruling are to be tested in the European court of justice, the Financieele Dagblad reports on Saturday. 

The Dutch High Court said on Friday the requirement that an expat should have lived 150 kilometres from the Dutch border to qualify for the tax break needs to be assessed at a European level. The 150 kilometre limit appeared to be arbitary, the court said, and had led to divided opinion in lower Dutch courts.

The eligibility rules for the tax break, which effectively means expats only pay income tax on 70% of their income, were tightened up at the beginning of last year. The aim of the tax cut is to compensate workers for the higher cost of working in the Netherlands on a temporary basis.


The changes were introduced because of finance ministry concerns the ruling was being exploited. It can be claimed for up to eight years

In order to qualify, expats must now have lived at least 150 kilometres from the Dutch border before moving to the Netherlands. They should also have a Dutch salary of at least €52,000 if over the age of 30 and have specific skills not available in the Netherlands. Different salary requirements apply to academics.

The High Court said the 150 kilometre limit leads to workers being treated differently depending on where they came from, and this could conflict with European rules on the free movement of people.


The Financieele Dagblad said the case has been brought by tax consultancy Deloitte on behalf of a client who had to live and work in the Netherlands during the week for a temporary period but is permanently based in Germany.

Under European law she has to pay tax in the country where she works but because she lives less than 150 kilometres from the border, she is not entitled to the 30% ruling.

Tax experts said at the time the new rules were introduced they would be challenged at a European level because people from Belgium and large parts of Germany would not qualify.

Read the court ruling (Dutch)
More on the 30% ruling

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