Dutch tax decree on international short term assignments

At last, the Dutch Ministry of Finance has issued the Decree with guidelines relating to the Supreme Court decisions of December 2006 relating to the so-called economic employer concept.

Wages of non-resident employees in the Netherlands

For practical reasons it has been determined that, in general, during intra-company assignments of 60 working days or less in a period of 12 months, the host country company will in general not be regarded as an economic employer.

Therefore, the wages of non-resident employees relating to the Dutch working days will not become taxable in the Netherlands.

Similarly, Dutch tax residents assigned to work abroad will not be entitled to a relief of double taxation while working for such a period abroad, but will remain fully taxable in the Netherlands.

Regulations relating to withholding requirements

On the basis of a previous approval, the Dutch Group company (being the economic employer) may act as the withholding agent for Dutch wage tax purposes in the absence of a legal employer in the Netherlands.

This is important for, amongst others, the application of the 30% ruling while working in the Netherlands. It was also announced that new legislation will be proposed to provide a legal basis for this position.

What the Decree provides

The Decree provides more clarity on the tax treatment of short term intra-company assignments. Still, companies need to investigate whether they meet all the conditions set and, furthermore, need to investigate the consequences if the assignment exceeds 60 days.

However, still situations of double taxation or double tax exemption may occur. In such cases the Dutch authorities may start discussions with the other tax treaty country.

What comes next

It is envisaged that the Dutch tax authorities will audit international companies on the tax treatment of short-term assignments on a larger scale. Companies (will) need to adjust their internal procedures in order to be in compliance with the various requirements in the Netherlands.

Eric Jansen


Eric Jansen

Eric is the Dutch Tax Partner for Taxpat B.V. in Amsterdam. Before co-founding Taxpat, Eric worked with two of the "Big Four" consulting firms (PwC and E&Y). His experience spans...

Read more



Leave a comment