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.
Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.
Circular 230 disclosure
To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.