Early termination 30% facility due to 150 kilometre limit is permitted | Deloitte


Early termination 30% facility due to 150 kilometre limit is permitted

When performing the interim test after five years, any 30% decisions whose starting date is between 2012 and 2017 can likewise be tested for the 150 kilometre criterion. This is what the Supreme Court ruled recently.

13 December 2017

A Belgian resident started an employment with a Dutch employer on 1 July 2007 and was eligible for the so-called 30% facility. As from 1 January 2012, however, this facility can only be applied if an employee meets the salary requirement and on top of that lives at a distance from the Dutch border of more than 150 kilometres. Since this Belgian employee lived at a distance of less than 150 kilometres from the Dutch border, the withholding agent no longer applied the 30% facility as from 1 July 2012. Still, it did file an objection against the payroll tax paid.

Interim test

The question here is whether the interim test after the first five years of the period in which the 30% facility applies can include a test for the 150 kilometre criterion. This question arises because this criterion had not yet existed when the employment in the Netherlands started (which was the starting date of the 30% facility). A confirmative answer in this case would mean that the 30% facility effectively stops as from the date of the interim test.

Together with the implementation of the 150 kilometre criterion, the interim test was made stricter, too. The objective was to have any 30% facility whose term was shorter than five years on 1 January 2012, be tested for the 150 the kilometre criterion and the salary requirement as from the sixth year. The legislation did not, however, stipulate this clearly. The provision involved was open to another interpretation, being that the term of the 30% facility would only be cut for employees who had been incoming employees when starting their employment, but who no longer satisfied the salary requirement at the time of the test.

Intention of regulator is clear

The Supreme Court considers the intention of the regulator to be clear: the interim test can include a test of the 150 kilometre criterion. The text of the implementation decree may be unclear but it does not oppose this interpretation either, according to the Supreme Court.

Subsequent to a preliminary ruling by the Court of Justice of the European Union, on 4 March 2016 the Supreme Court already ruled that the 150 kilometre limit is not contrary to EU law. This made one thing clear for employments in the Netherlands starting on or after 1 January 2012. Only employees who lived at a distance of more than 150 kilometres from the Dutch border for more than two thirds of the 24 months preceding the start of the employment in the Netherlands, would still qualify for 30% facility. Considering the related ruling of Supreme Court, the 150 kilometre criterion would seem to have passed all tests.

Source: Supreme Court 8 December 2017, no. 16/05970, ECLI:NL:HR:2017: 3083

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