In Belgium, a favourable taxation regime exists for foreign executives, researchers and specialists, who have been recruited on the international labour market or who are assigned to Belgium within an international group of companies.

This regime can be requested by the employer, irrespective of the country of origin of the individual and of the distance between the Belgian border and the foreign home of this person.

In the Netherlands, a similar tax regime exists, the so-called 30% facility. This system includes a tax exempt allowance for expenses, related to the international nature of the employment.

In their search for new tax revenues, the Dutch authorities have from 2012 onwards invented the so-called 150 kilometer limit. Only employees, who are hired abroad, and who live more than 150 km from the Dutch border, can now qualify for the 30% facility. Frontier zone employees are excluded.

The underlying argumentation is that employees, who live closer toThe Netherlands, have no extra costs in case they would start to work in The Netherlands and that therefore no tax free allowance is needed. Some people suspect, however, that this argument is only covering up the underlying objective to catch easy tax revenues rather than responding to actual circumstances and needs.

The 150 km limit has been contested from the start as it is mostly disadvantageous for Belgians and for border area Germans, who want to work in The Netherlands. Other foreign employees are not affected by the rule. One can argue that this constitutes a discrimination or unequal treatment beween inhabitants of the EU.

Since 2012 discussions are going on and up to now, the lower courts of justice (in The Netherlands) have come to different conclusions. In the meanwhile the Dutch High Court (Hoge Raad) got involved and recently a prejudicial question was raised by this court to the European Court of Justice.

More specifically, the question was raised whether or not the 150 km rule is in line with the free movement of employees within the European Union, whereby some inhabitants of the EU can benefit of the 30% rule, while others are excluded.

All international employers are curious as to the outcome of this discussion. In the meanwhile, employers may consider to always request the 30% facility, even for employees who live less than 150 km of the Dutch border in order to keep their case open..