Update – Netherlands – Case law on the 150 km criterion of the 30% regime

Written by Nicolas de Limbourg 27 October 2015


As mentioned in our headline of 27 February 2015, the European Court of Justice (‘ECJ’) issued a preliminary ruling on the question whether the 150 km criterion of the 30% regime for incoming workers is to be upheld.

The ECJ was of the opinion that the 150 km criterion – in itself – does not conflict with the freedom of movement for workers within the EU. According to the ECJ, this regime may however be considered as conflicting with that EU principle if the limits set under the regime, i.e. ‘30% of the taxable base’ and the ‘150 km criterion’, have been established in a way that it systematically results in manifest overcompensation compared to the extraterritorial expenses actually incurred. The ECJ instructed the Dutch Supreme Court to examine whether this is the case.

On 29 September 2015, Advocate General Niessen of the Dutch Supreme Court gave a further opinion in this respect. After making an analysis of the underlying legislative documentation and the effects of the 30% ruling on two hypothetical situations of taxpayers coming into the Netherlands from a place located more than 150 kilometres from the Dutch border, the Advocate General was of the opinion that, despite overcompensation to certain small groups of taxpayers, there was no clear and systematic overcompensation under the 30% rule in general.