Court verdict on 30% Tax Ruling for Ukrainian Refugee Worker
A recent court case in the Netherlands has clarified how the 30% tax ruling applies to individuals relocating under unusual circumstances, such as fleeing a war. Here’s an overview of the case and its implications.
The Background
A Ukrainian man fled to the Netherlands in March 2022 with his wife and children because of the ongoing war in Ukraine. He was granted temporary residence under the European Temporary Protection Directive. This status provided him with a residence permit and access to basic services, including housing, a Dutch social security number (BSN), and the ability to work. While in the Netherlands, the family continued renting a home in Ukraine and continued paying all related expenses and utilities and their children continued their Ukrainian study program online.
Initially, he worked on a ship flying the Liberian flag in international waters from April until August 2022. In September 2022, he signed a one-year employment contract with a Dutch company, starting in October 2022.
To help with the costs of relocating, he applied for the 30% tax ruling for the contract with the Dutch company. The tax inspector denied his application.
The Dispute
The Dutch tax authorities denied his application for the 30% ruling, arguing that the man did not meet the criteria for an “incoming worker” as defined by Dutch tax law. Their reasoning included the following points:
Relocation reasons: The man came to the Netherlands to escape the war, not for work. They argued that the 30% ruling is intended for workers who move primarily because of employment.
Residence status at the time of hiring: By the time the man signed his employment contract in September 2022, he had been living in the Netherlands for several months. The authorities claimed that he was already a resident of the Netherlands and therefore could not be considered “recruited from abroad.”
The man disagreed with this decision and challenged it in court. He argued:
His relocation to the Netherlands was clearly temporary, as he retained significant ties to Ukraine, including a family home, bank account, and children following the Ukrainian school curriculum online.
His residence in the Netherlands was forced by the war and based on temporary protection, not permanent settlement.
The relevant timing for the 30% ruling should not be when he signed his contract but when he started working for the Dutch company in October 2022.
He asserted that the tax office’s interpretation of the law was overly rigid and failed to consider the unique circumstances of his case.
The Court’s Ruling
The court ruled in favor of the Ukrainian worker, offering a detailed explanation of why he qualified for the 30% ruling:
Motivation for relocation doesn’t matter:
The court clarified that the reasons someone relocates to the Netherlands—whether personal, professional, or humanitarian—do not affect their eligibility for the 30% ruling. The ruling’s purpose is to support workers recruited from abroad, not to scrutinize their reasons for moving. The court noted that personal reasons often play a role in any relocation, such as seeking better opportunities or escaping hardship. These motives do not disqualify someone from the tax benefit.Residence status was temporary:
While the man had been in the Netherlands since March 2022, the court found that his stay was based on temporary protection due to the war, not a decision to settle permanently. Factors such as keeping his home and financial ties in Ukraine and his children’s continued enrollment in the Ukrainian education system supported this conclusion.Timing of recruitment:
The court emphasized that what matters is the worker’s status at the time of recruitment. On September 1, 2022—when the man signed his contract—he had not yet established a “sustainable personal connection” to the Netherlands. Despite having temporary housing and being registered in the Dutch population database (BRP); these were requirements of his temporary residence permit and not indicators of permanent residence.
The court concluded that the man met the criteria for the 30% ruling as an “incoming worker.” This decision meant he could apply the tax benefit retroactively from October 2022.
Key Takeaways
Relocation reasons are irrelevant: Whether you move to the Netherlands for work, personal, or humanitarian reasons, you may still qualify for the 30% ruling as long as you meet the other criteria.
Temporary residence doesn’t disqualify you: If your stay is temporary and you maintain ties to your home country, you may still qualify as being recruited from abroad.
Challenge rejections when necessary: Dutch tax laws can be complex, but this case shows that incorrect decisions can be overturned, especially for expats facing unique circumstances.
Determining one’s residency depends on a lot a factors and can be difficult to assess, but can be of utmost importance as this case clearly illustrates. Having an expert on your side can definitely help. Contact us if you would like us to discuss your specific situation.
