Tax agreement with Germany and Belgium on frontier workers

19 juni 2020 | Door:  Barry Scheer

Belgium, Germany and the Netherlands have reached an agreement on the tax treatment of employees (frontier workers) who work at home.

Working from home because of COVID-19

Working from home is currently common due to the COVID-19 pandemic. The main rule under tax treaties is that the employee’s salary is taxed in the working country. Because of working from home, this would be the country of residence, but this can lead to unwanted income (tax) consequences.

Temporarily suspended

The above principle has therefore been temporarily suspended. This means that a Belgian or German employee who normally works in the Netherlands, but works at home temporarily will still be taxed in the Netherlands. Conversely, a Dutchman who works normally in Belgium or Germany and now works at home is taxed in Belgium or Germany.

Deviation is allowed

Dutch employees who normally work in Belgium or Germany and now from home can also opt to have their salary taxed in the country of residence, the Netherlands. This choice must be incorporated in the 2020 income tax return.

Extension of agreements

These agreements apply in any case until 30 June 2020 and can be extended thereafter.