The Dutch Supreme Court has ruled that the reduction of the maximum duration of the 30% ruling from eight to five years, including the limited transitional arrangements introduced in 2019, is lawful.
The case concerned an employee who had been granted a 30% ruling in 2012, originally valid until November 2021. As a result of the legislative amendment and the transitional rules, the benefit ended earlier, on 1 January 2021.
The Supreme Court held that the legislator enjoys broad discretion when amending tax legislation, including in designing transitional arrangements. Judicial intervention is only possible if the legislator acts in a manifestly unreasonable manner, which was not the case.
The Court further confirmed that formal legislation cannot be set aside on the basis of general legal principles, except in exceptional circumstances that the legislator failed to take into account. No such circumstances were found. Nor is it decisive whether the impact on specific groups was sufficiently investigated or whether the justification for the amendment was persuasive.
Claims based on the right to property (Article 1 of the First Protocol to the ECHR) and on discrimination were also rejected. According to the Court, the shortening of the 30% ruling period, even with a limited transition, remains within the legislator’s policy margin.
In practice, this means that in many older cases the 30% ruling ended on 31 December 2020, even where the original decision stated a later expiry date.