Netherlands: Interim evaluation of 30% ruling - KPMG Global
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Netherlands: Interim evaluation of 30% ruling, employees within 150 kilometers

Netherlands: Interim evaluation of 30% ruling

The Dutch Supreme Court addressed when an interim evaluation of the 30% ruling is permissible, in light of the introduction of the 150-kilometer criterion.


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The “30% ruling” is a fixed allowance paid to compensate for the costs of a temporary stay outside the country of origin (extraterritorial expenses). Since 1 January 2012, only employees who resided more than 150 kilometers from the Dutch border during at least two-thirds of the 24 months preceding the commencement of their employment or secondment in the Netherlands are eligible for the 30% ruling. 

For employees who already made use of the 30% ruling on 1 January 2012, an interim evaluation was to take place within five years of the date of the 30% ruling being granted. For purposes of this interim evaluation, the Dutch tax authorities apply the 150-kilometer criterion. This means that an employee who resided in Belgium or no more than 150 kilometers from the Dutch border (for instance, in Luxembourg and in the German and French border regions) prior to their Dutch employment may no longer apply the 30% ruling after the expiry of the five-year period.

Supreme Court’s conclusion

The Supreme Court found that the intention of the legislation was to apply the new 150-kilometer criterion at the time of the interim evaluation after five years. According to the Supreme Court, the text of the decree pertaining to the 30% ruling does not preclude such an interpretation. The Supreme Court also dismissed relying on the principle of “legitimate expectations”—i.e., the Dutch tax authorities had issued a decision to the employee for application of the 30% ruling for a period of 10 years. 

Based on this Supreme Court judgment, the interim evaluation must now take into consideration whether employees who already made use of the 30% ruling on 1 January 2012 had resided within 150 kilometers of the Dutch border for more than eight months during the 24 months before their employment in the Netherlands. In such instances, the employee is no longer entitled to apply the 30% ruling after the end of the five-year period.


Read a December 2017 report prepared by the KPMG member firm in the Netherlands

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