• Service: Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/13/2013

Netherlands - Foreign employee 30% tax relief referred to CJEU 

August 13: The Dutch Supreme Court (Hoge Raad der Nederlanden) has requested that the Court of Justice of the European Union (CJEU) clarify whether a Dutch provision allowing 30% tax relief only for employees who reside more than 150 kilometers from the Dutch border during two-thirds of the 24-month period preceding the start of their employment or secondment in the Netherlands is consistent with (or is in violation of) EU law.


Foreign employees with specific expertise, that is deemed to be scarce in the Dutch labor market, are eligible for a 30% tax relief benefit. Under this tax relief measure (provided certain conditions are satisfied), 30% of an eligible employee’s salary is treated as a tax-free allowance to cover additional expenses incurred as the employee is temporarily living and working outside his or her home country. The remaining 70% is treated as taxable salary.

As of January 1, 2012, an additional criterion applies—i.e., only employees who resided more than 150 kilometers from the Dutch border during two-thirds of the 24-month period preceding the commencement of their employment in or secondment to the Netherlands, are eligible for the 30% tax relief benefit.

The position of the Dutch Advocate General is that the 150 kilometer rule does not violated EU law. Read TaxNewsFlash-Europe: Netherlands - 150-kilometer limit under “30% ruling” tax relief

The Supreme Court, finding no EU law on this issue, has referred the issue to the CJEU with a request for a judgment to clarify the EU law in this area.

Read an August 2013 report prepared by the KPMG member firm in the Netherlands: Dutch Supreme Court requests Court of Justice of the European Union for a preliminary ruling on whether the 150 kilometer criterion in the 30% ruling violates EU law

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