The Netherlands and Germany announced on April 14, 2025 that the mutual tax treaty will be adjusted for frontier workers. The adjustment makes it possible to work from home for up to 34 days a year without tax consequences.
To determine in which country income from paid employment is taxed, in principle the place where the work is actually carried out is considered. For example, if a resident of the Netherlands works in an office in Germany for a German employer, then tax liability arises there on the wages received.
Tax implications home working
Complications can arise when the employee has a home working day. A home working day leads to a shift of the right of taxation, in this case from Germany to the Netherlands for the wages attributable to this home working day. This raises tax issues.
To avoid these problems, the Netherlands and Germany have agreed to amend the tax treaty. Under the amended treaty, employees can work from home for a maximum of 34 days per year without the right of taxation being transferred from the regular country of work to the country of residence.
The arrangement thus offers a solution for occasional homeworkers and thus gives more certainty about the tax liability and leads to less administrative hassle. Incidentally, this treaty adjustment only applies after parliamentary approval in both the Netherlands and Germany.
Letter of intent
Structural home workers do not benefit from the new regulation. These are for example employees who usually work from home 1 or 2 days a week. The Netherlands also wants to find a solution for these frontier workers and has therefore signed a declaration of intent with Germany to continue discussions in the future about a home working arrangement for this group. Incidentally, the agreement reached between the Netherlands and Germany refers only to the frontier worker's tax position, not his social security position. A separate assessment framework therefore applies to the question of where a frontier worker is socially insured.
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