To avoid tax risks, it is important to check the 30%-ruling for employees lived within 150 km from the Dutch Border. Employees to whom the 30%-ruling was granted before 2012 have to meet the 150 km border criteria after 5 years!

150 KM RULE The conditions for the 30%-ruling have been changed on January 1, 2012. One of the new restrictions was the 150-kilometer requirement. In order to qualify for the 30%-ruling the employee should have lived, prior to the employment in the Netherlands, for at least 16 of the 24-months period at a distance of more than 150 km from the Dutch border. The Dutch Supreme Court ruled earlier that the 150-kilometer requirement is in accordance with international law. 5 YEAR PERIOD  On the basis of the transitional law the employees to whom the 30% ruling was granted before 2012 could keep it for 5 years after grant date despite that they were living within 150 kilometer from the Dutch border. The employees to whom the 30% ruling was granted before 2012 received it however initially for 10 years. SUPREME COURT The pending question was therefore whether employees who were already under the 30%-ruling application on January 1, 2012 should meet the 150 kilometer border criteria after 5 years. The Dutch supreme Court ruled that employees, who had on January 1, 2012 the 30% ruling application granted, should meet the 150 kilometer criteria. The employee will therefore after 5 years no longer be eligible for the 30%-ruling if he was, prior to the employment in the Netherlands, living less than 16 months of the 24 months at a distance of less than 150 kilometers from the Dutch border. CONCLUSION It is therefore important to stop processing the 30%-ruling after 5 years if the employee would not be eligible anymore. Please contact me, if you have any questions about this article.