150 km limit applies to current 30% facility
According to A-G Wattel, if a 30% decision has been issued before 1 January 2012, as from the sixth year of the term of that decision the inspector has the competence to test it for the 150 km limit, which became effective on the said date.
12 july 2017
Prior to her starting to work for a Dutch employer, a female employee had lived less than a 150 kilometres away from the Dutch border. She had been granted a favourable decision to apply the 30% facility from 1 July 2007 through 30 June 2017. However, the term “incoming employee” for purposes of the 30% facility has changed as from 1 January 2012. As from that date, a qualification as an “incoming” employee is subject to the condition that the employee lived at a distance of more than 150 kilometres from the Dutch border in the two years prior to starting the employment in the Netherlands, for a period of at least 18 months.
On top of this, as from 1 January 2012 the inspector has the competence to test whether the employee is still an incoming employee. He can do so as from the sixth year of the term of the issued 30% decision. If this is no longer the case, the inspector has the authority to terminate application of the facility. Transitional law applied in the case of the employee involved. In short, this meant that if less than five years of the term of the 30% decision had expired on 31 December 2011, the new criteria would not be applied for the test until after those five years. The employer knew this and had no longer applied the 30% facility as from 1 July 2012. The employee filed a notice of objection and appeal and the case was ultimately brought before the Supreme Court.
The A-G’s conclusion
A-G Wattel’s conclusion was that, while the text of the various provisions in the Wages and Salaries Tax (Implementation) Decree 1965 would not be up for any poetry prize, it was clear that new criteria applied to the term “incoming employee” as from 1 January 2012. Clearly the employee did not satisfy these criteria.
The employee had also argued that terminating a decision that had been issued without reservation for a period of ten years because of an amendment of the legislation, was contrary to the principle of legitimate expectations. According to the A-G, the decision was clearly contrary to the law. So, it was reasonably recognizable that any observance of the decision could not be counted on after 1 January 2012. What’s more, provided the female employee would provide reasonable arguments for doing so, tax-free reimbursement or specific exemption of extraterritorial expenses was also possible after 1 January 2012. Recent research has shown, however, that the allowance based on the 30% facility is not a “systematic excessive compensation” of the costs actually incurred. As a result, the material consequences of the 30% facility being cancelled are small. It is now up to the Supreme Court to provide a definite answer.
Although the amendment of the law referred to above was implemented quite a while ago, the issue discussed in this case is still relevant for 30% decisions whose starting date is 31 December 2011 at the latest. The sixth year will then have started on 31 December 2016. If the Supreme Court follows the A-G, as from that date it will no longer be possible to apply the 30% facility in similar cases.
Source: Conclusion AG Wattel 15 June 2017, no. 16/05970, ECLI:NL:PHR:2017:565