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Working in EuropeTaxation/salariesNetherlands

Avoiding double taxation



It is possible that even though you stay in the Netherlands, from a fiscal point of view, you are still seen as a non-resident tax payer. For example, because other family members still live in your country of origin and you visit them regularly. Because the Dutch employer performs the task as withholding agent on the source of income and the taxable country of residence will tax you on your world income, this may lead to double taxation. To avoid double taxation it is first important for the employer to make a correct judgement on what your taxable country of residency is. In most treaties the country of residence is determined by balancing someone’s social, economic and legal ties to a country. A strong social tie to the country of origin could be decisive.

If the country of fiscal residency is not the same as the country of source income, the bilateral tax agreement applies. To avoid double taxation the Netherlands has concluded tax treaties with a large number of countries. A tax treaty is an arrangement between two countries about which of them has the right to tax certain types of income. In this way, a situation is avoided where you would have to pay tax in two countries on the same income. Treaties with different countries are not always identical in content. If the Netherlands has concluded a tax treaty with the country from which you receive income, you can only find out about the exact tax consequences in the Netherlands by consulting the applicable treaty.

Contact your HR advisor if you have any questions regarding your taxation.