Based on the so-called 30% ruling, an employer may grant a tax free allowance with a maximum of 30% of the gross salary to certain category of employees working in the Netherlands. One of the conditions to qualify for the 30% ruling is that the employee’s normal place of residence, during a period of at least 16 months in the last 24 months of Dutch employment, is more than 150 kilometers from the Dutch border.

According to the European Commission the 150-kilometre criteria as applicable under the 30% tax ruling is disproportionate and excessive as it should be possible to impose less restrictive requirement examining the distance between the employee’s place of residence and place of work. Although it is important to be aware of the European Commission’s point of view, this issue is still to be ruled upon by the European Court of Justice and the Dutch Supreme Court.