What is the 150 kilometer regulation?
The 150-kilometer regulation means that only people having lived in an area outside 150km from the Dutch border before moving to the Netherlands are subject to the 30% ruling (assuming that the other conditions have also been met).
The background of the regulation is that the Dutch government has the idea that people who live so close to the Dutch border do not need to be compensated for extra costs.
The Court of Justice of the European Union decided in February 2015 that the 150-km criterion is no obstacle to the free movement of employees, despite the roughness of the regulation. It would be different if the limits, as meant by the 150 km regulation, would over-compensate the actual extraterritorial costs systematically. This required further investigation by the Dutch Supreme Court.
Supreme Court decision
The Supreme Court of the Netherlands has now decided that the 150-kilometer criterion in the 30%-ruling is not in contradiction with EU law. This means that the current practice of the 30%-ruling stays in tact. The ruling is only applicable if the employee lived more than 150 kilometers from the (any!) Dutch border during a period exceeding two-thirds of the 24 months period before the start of the employment.
150 kilometer from Dutch border
Now you may ask how this distance is being measured. It is the vast distance from the living place to the nearest Dutch city. There are special programmes for this; www.afstandsmeten.nl and www.distance.to for instance. And the Tax Authorities have decided that all places in the UK are more than 150 kilometers away from the Duch border.