Dutch Supreme Court rules on 150 km requirement in 30%-ruling

Posted on 3rd January, 2016

Estimated reading time 4 minutes

Following a ruling by the European Court of Justice (ECJ), on 4 March 2016, the Dutch Supreme Court concluded that the 150 km requirement and the reduction rule in the 30%-ruling is not contrary to EU law.  (For more information about the 30%-ruling see our previous article here). 

However for tax payers who arrived prior to 1 January 2012, their position regarding the 150 km-requirement is still unclear.


The 30%-ruling is a special tax regime designed to attract foreign workers with special skills or expertise, of which are either scarce or unavailable in the Dutch labour market.  If an employee is eligible for the 30%-ruling, they will benefit from a tax free allowance of 30% on their salary.

Since 1 January 2012, the scope of the 30%-ruling has been limited in a number of ways.

150 km requirement

One of the limitations was the introduction of the 150 km requirement.  In order to qualify for the 30%-ruling the employee must have lived at a distance of more than 150 km from the Dutch border during at least two thirds of the 24-month period immediately preceding the start of their employment in the Netherlands.  This prevents residents of neighbouring countries (Belgium, Luxembourg, Northern France, a small part of the UK and the western part of Germany) from making use of the tax free allowance.

Reduction rule

Another limitation was the tightening of the reduction rule.  All previous periods of work or stay in the Netherlands that ended less than 25 years prior to the start of employment will be deducted from the maximum grant period of 8 years.  This effectively excludes any returning Dutch national employees.

Recent developments

Dutch taxpayers were of the opinion that the 150 km criterion was a prohibited restriction on the free movement of workers within the EU, but the ECJ (and now also the Dutch Supreme Court) confirmed that this limitation, as well as the reduction rule, are not in conflict with EU and international law. 

What to expect

One issue the Dutch Supreme Court has not addressed is whether the 150 km requirement applies to taxpayers who arrived prior to 1 January 2012, as the 150 km criterion was only introduced in 2012. 

Previously, five years after arrival in the Netherlands employees would have been subjected to an interim test in order to continue benefitting from the 30%-ruling for a maximum of another 5 years (the maximum grant period of the 30%-ruling has now decreased from ten to eight years).  The interim test has since been abolished, which means those arriving post 2012 would need to abide by the 150 km criterion from the start.  Employees recruited from within the 150 km zone before 2012 will have their 30%-ruling terminated early, as it conflicts with current legislation. 

There is still room for debate; the outcome of a court case on this matter has yet to be determined.  Taxpayers who filed an objection against the termination of their 30%-ruling for the reason above should inform tax authorities that they wish to maintain their objection until the Supreme Court have decided on this matter.  This is to prevent tax authorities from pre-emptively declining the objection. 

Further information

For further information or to discuss any of the issues raised, please contact Rina Driece on +31 10 224 6 424, Loyens & Loeff Netherlands.  

Further reading

Supreme Court rulings

ECLI:NL:HR:2016:360 (Dutch)

ECLI:NL:HR:2016:355 (Dutch) 


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