30% ruling update: developments 150 kilometre criterion EU Court

On February 24th 2015 the EU Court has decided on the long pending case regarding possible discrimination caused by the 150 kilometres criterion as introduced in the 2012 30% ruling legislation. The Court in its decision has followed the prior conclusion of the Advocate-General in this case and in principle has found the criterion not in breach with EU Laws. However there is still a chance the Dutch Supreme Court will not allow the 150 kilometre criterion…

In 2013 the Dutch Supreme Court referred the above mentioned case to the EU High Court, which sought to assess whether the 150-kilometer border criterion is contrary to EU law and, if so, whether there is justification, that is to say a reason of general interest which justifies a different treatment of similar cases.

The EU Court has considered that this is not the case, unless it appears that the 30% ruling provides an obvious over-compensation in relation to the actually costs incurred by the qualifying expats. The Dutch court will have to determine whether this is the case and will have to do a study to assess these actual expenses. If there is an obvious over-compensation this will have an impact on the current 30% ruling criteria, and could offer new possibilities for expats now falling under this 150 kilometre criterion, to continue or to obtain the 30%-ruling. It will also be the question whether the oncoming Supreme Court decision will have an impact on expats who do not qualify for the ruling on other grounds than solely the 150 kilometre criterion.

Please note that if you are an expat faced with this 150 kilometre criterion, various action towards the tax authorities may well be required for the wage tax and personal income tax.

Feel free to consult us regarding the required action.

Contact: Jan-Hein van Leeuwen