Prior domicile and the 30% ruling

Prior domicile and the 30% ruling

March 23, 2019
6 Mins

30% ruling ciriteria to be met

To qualify for the 30% ruling an employee has to meet different criteria. For instance he or she needs to have a specific expertise which is scarce on the Dutch labour market and there are salary requirements in order.

Then there is the pretty arbitry "150 km" rule. That is 150 km measured in a straight line from your former home town to the Dutch border in order to be eligible to be granted the 30% ruling. All of this not in conflict with the principle of freedom of movement within the EU according to the European Court of Justice.

Facts and real life circumstances determine domicile

Another ciriteria is that an employee has to be recruited from abroad. The Duch Supreme Court has clearly stated that this entitles that at the time of conclusion of the employment contract an employee can not yet have domicile in Holland.

Where a person has domicile is determined by facts and real life circumstances. For instance where you live or work. It's the centre of his social life, where your friends and family live. Where you receive mail, go to the gym etc. This not only determines the fiscal residency of a person but is also of vital importance when it comes to the 30% ruling in the Netherlands.

A recent Dutch court ruling once again states this clearly. In this particular case a foreign student came to Holland in 2010 to obtain a degree in Science Automotive Technology. after finishing his master in 2012 he started working for a Dutch employer in 2013. Late 2014 the Dutch tax authorities denied him the 30% ruling.

The tax inspector arguements are clear. The student has been living in the Netherlands as of 2010. He points out to the student room, Dutch bank account, healthcare insurance, Dutch correspondence adress etc. On top of this there was a Scholarship Agreement with his school which obligated him to work in the Netherlands for at least 3 years.

The court ruled it not plausible that the student was recruited from abroad and the application of the 30% ruling was rightly refused.