Are you working abroad for a part of the year, while you are living in the Netherlands? Of course, you don’t want the risk to be taxed in two countries for the same income. Fortunately, the Netherlands has tax treaties with various countries to prevent double taxation. Such a tax treaty usually includes the 183-day rule. This arrangement determines in which country you have to pay tax on your salary.
What does the 183-day rule entail?
Many countries have drawn up tax treaties about what country may levy tax on the income. In most bilateral tax treaties between the Netherlands and other countries, it has been agreed that the country where the employee works may levy tax on the salary.
But such a treaty often includes the 183-day rule. If the 183-day rule applies, the country of residence may levy income tax. There are three conditions that must be met.
1
The employee stays in the work country for less than 183 days in twelve months.
2
The salary is paid by an employer that is not a tax resident in the work country.
3
You do not work at a permanent establishment of your employer in the work country.
Is the 183-day rule applicable in your situation?
Are you wondering whether you can work outside the Netherlands without this having consequences for your tax return? So if you partly work or are going to work abroad, it is important to check whether you qualify for the 183-day arrangement.
183-day rule not applicable – taxed in country of employment
Do you not meet the conditions mentioned above? Then your salary is taxed in the country of employment if you stay there for more than 183 days in a year. Not working, but being physically present is relevant (e.g., also weekends). For example, do you partly work for a non-Dutch company in France? Please note: France may only levy tax on the days worked in the country of employment (France). The days worked in the Netherlands (or another country) are taxed in the country of residence (the Netherlands).
183-day rule applies – taxed in country of residence
In some cases, your wages are fully taxed in your home country, even if you work for a longer period in another country. This is when the conditions are met. An example of this is that your Dutch employer assigned you to work in France, which makes you stay there for more than half of the year. In this case, the 183-days rule applies, and the country of employment is not entitled to levy tax on the wages.
M-form and the 183-day rule
Many people who have to submit the M-form may have to deal with the 183-day rule. In order to determine where someone is taxed, it is important to determine your tax residence. Several factors influence this. Think of registering with the municipality or where your family lives, but also where you go to the doctor.
We are happy to help
Do you want to be sure that you avoid double taxation and do not pay too much or too little tax? We help you submit your tax return. Contact us using the details below.
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