Enhancing Remote Work Opportunities: Amendment to the Netherlands-Germany Tax Treaty
On April 14, 2025 the Netherlands and Germany took an important step toward improving remote work opportunities for cross-border workers. The two countries agreed to amend the tax treaty so that cross-border workers can work from home for up to 34 days per year without having to pay taxes on their income in both countries. This amendment is intended to ease the tax burden and reduce administrative overhead for cross-border workers who regularly work from home.
Tax treaty and cross-border remote work
A tax treaty prevents cross-border workers from being taxed on the same income in both the country where they reside and the country where their employer is located. Generally, employees pay income tax in the country where the work is physically performed. If cross-border workers work from a different country than where their employer is based, taxing rights may also be granted to that other country. This means that taxes may have to be paid in the country of residence for the portion of income earned from remote work, as well as in the employer's country for the remaining portion of the income.
Key advantages of the amendment
Under the new arrangement, taxing rights for up to 34 remote workdays per year are retained entirely by the employer's country, with a remote workday defined as a day on which more than 30 minutes are worked from home. This amendment provides greater clarity and reduces administrative burdens. This is beneficial for cross-border workers, as they only need to declare their income in the employer's country, reducing uncertainty about their net income. Additionally, extra administrative burdens, such as complex tax calculations, are minimized.
Looking ahead: future discussions
Although the amendment is a positive development, not all cross-border workers will benefit from it. Employees who work from home for more than 34 days per year on a regular basis fall outside this arrangement. Therefore, the Netherlands and Germany have signed a declaration of intent to continue discussions on a more comprehensive remote work arrangement. The goal is to eventually allow more than 34 work-from-home days per year and to provide employers with greater certainty about the tax implications of remote work.
Next steps for implementation
Before the amendment to the tax treaty takes effect, the proposal must be approved by the Council of State (‘Raad van State’) and the Dutch parliament. The German parliament must also agree to the change. Once adopted, this amendment will mark a significant milestone in cross-border employment relationships, fostering a more adaptable work environment.
If you have any questions about this amendment or how it might affect your situation, feel free to reach out to us. Whether you have questions about remote work related to other countries or need clarification on specific details, we would be happy to help you.
