An amendment to the Netherlands-Germany tax treaty that affects cross‑border remote workers entered into effect on 1 January 2026.
Under the current treaty, cross-border workers are generally taxed in the country where they physically work. For example, when an employee who is a tax resident of Germany is employed by an employer established in the Netherlands, the employee’s salary is taxed in the country where the work is physically performed. This means that the Netherlands will have the right to levy tax for the time the employee spends performing their employment activities in the Netherlands and Germany will have the right to levy tax for the time the employee works in Germany (and third countries).
The amendment introduces an exception to the general rule. An employee may work from home in their country of residence for up to 34 days per year without affecting the allocation of taxing rights. Thus, in the case of a German resident working for a Dutch employer, the full salary remains taxable in the Netherlands, even for the activities performed abroad if those activities outside the Netherlands do not exceed 34 days.
Workdays spent in third countries also count toward the home‑working threshold. Once the 34-days limit is exceeded, remuneration will still be apportioned based on the number of days worked in each country. Note that this arrangement concerns only income taxation and does not affect the employee’s social security position.
Although the arrangement is particularly beneficial for employees who work from home on an incidental basis, it does not automatically provide a solution for employees who regularly work from home one or two days a week, as the 34-days threshold will be exceeded quickly. For this reason, the Netherlands and Germany have signed a declaration of intent to explore whether a more generous home‑working regime could be introduced in the future, providing more clarity and tax predictability for this group as well.
Robin Schalekamp
BDO in Netherlands
Under the current treaty, cross-border workers are generally taxed in the country where they physically work. For example, when an employee who is a tax resident of Germany is employed by an employer established in the Netherlands, the employee’s salary is taxed in the country where the work is physically performed. This means that the Netherlands will have the right to levy tax for the time the employee spends performing their employment activities in the Netherlands and Germany will have the right to levy tax for the time the employee works in Germany (and third countries).
The amendment introduces an exception to the general rule. An employee may work from home in their country of residence for up to 34 days per year without affecting the allocation of taxing rights. Thus, in the case of a German resident working for a Dutch employer, the full salary remains taxable in the Netherlands, even for the activities performed abroad if those activities outside the Netherlands do not exceed 34 days.
Workdays spent in third countries also count toward the home‑working threshold. Once the 34-days limit is exceeded, remuneration will still be apportioned based on the number of days worked in each country. Note that this arrangement concerns only income taxation and does not affect the employee’s social security position.
Although the arrangement is particularly beneficial for employees who work from home on an incidental basis, it does not automatically provide a solution for employees who regularly work from home one or two days a week, as the 34-days threshold will be exceeded quickly. For this reason, the Netherlands and Germany have signed a declaration of intent to explore whether a more generous home‑working regime could be introduced in the future, providing more clarity and tax predictability for this group as well.
Robin Schalekamp
BDO in Netherlands