News - Netherlands

Netherlands - March 2014

European Commission regards the 150-kilometre requirement as contrary to EU law

In our Q3 2013 E-News we reported on the Dutch Supreme Courtís request to the European Court of Justice for a preliminary ruling on whether the 150-kilometre limit in relation to the 30%-ruling contravenes  EU law.

The European Commission (EC) has recently communicated its opinion on this matter.

Under Dutch law, subject to certain conditions an employer can grant a tax free allowance equivalent to 30% of the gross salary to highly skilled foreign nationals coming to the Netherlands for a specific employment role. One of those conditions is that the individualís normal place of residence during a specific period of 24 months for tax purposes is more than 150 kilometres from the Dutch border, The EC takes the view that granting the tax benefit to some EU citizens and not to others this condition is in contravention of the fundamental principle of free movement of workers as provided under EU statute and case law..

According to the EC, the 150-kilometre criterion is disproportionate and excessive, and it certainly is possible to impose a less restrictive requirement for example by examining the distance between the employee's place of residence and place of work. The EC considers that the Dutch government's practical objections to this have not been demonstrated as such and are irrelevant. 


Although it is important to be aware of the ECís view, it has no legal effect and this matter is still to be ruled upon by the European Court of Justice and, subsequently, the Dutch Supreme Court.

For further information or to discuss the consequences of the above, please contact Rina Driece, on +31 10 224 6 424 at Loyens & Loeff Rotterdam.


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