Application tax treaty Netherlands - Germany during Corona crisis extended

Last update: January 4th, 2021

The agreement between the Netherlands and Germany on the tax treatment of frontier workers who are obliged to work from home or stay at home without being able to work as a result of the corona crisis has been extended again, now until the end of March 2021. The agreement that the Netherlands has concluded with Belgium on this subject is also extended until the same date.

Working from home

If workers are working from home only as a result of the corona virus or measures related to the corona virus, these working days may be attributed to the treaty country where they would have worked without the corona virus. As a result, the distribution of taxation between the two countries remains the same as before the corona virus. In order to apply this fiction, the following conditions must be met:

  • this fiction is applied uniformly in both countries;
  •  the employee keeps an appropriate record (i.e. an attestation from the employer of those home working days showing the direct link to the measures related to Corona);
  • the wages of the home working days are actually taxed in the treaty country where the employee would have worked.

Inactive with continued payment of wages

For the purposes of the tax treaty, when an employee is inactive at home with continued payment of wages due to the measures related to the corona virus, the tax treaty is applied as if the employee continued to work in accordance with the division of working days that would have applied without the measures related to the corona virus. Taxation is therefore not affected by the fact that the employee is temporarily unable to work.


Residents of the Netherlands who normally work in Germany (and are thus subject to German social security) and who are now inactive because of measures against the corona virus, can receive a German disability, unemployment or bankruptcy benefits instead of their regular salary. If the total gross amount of these (and other) German social security benefits in a calendar year does not exceed €15,000, the Netherlands has the right to tax these German social benefits based on article 17 of the tax treaty.

Since the above-mentioned German social security benefits are paid net and to ensure consistency with the application of the treaty for the days the employee has spent inactive at home while retaining salary, the Netherlands has taken a unilateral measure to exempt these social benefits from Dutch tax with a German social security benefit.


This agreement is valid for the period from March 11, 2020 to March 31, 2021, and will be extended by one month each time as long as neither country terminates the agreement.

Unilateral measure

In the Decree published on April 14, it is approved that “Kurzarbeitergeld”, “Insolvenzgeld” and “Arbeitslosengeld” received by a resident of the Netherlands in the period from March 11, 2020 to March 31, 2021 are exempt under the following conditions:

  • the taxpayer is entitled to receive “Kurzarbeitergeld”, “Insolvenzgeld” and “Arbeitslosengeld” for the first time, on or after March 11, 2020.
  • The taxpayer can provide information that substantiates that the first condition is met

These benefits are first included in the Dutch tax base and the tax is then reduced by the Dutch tax proportional to the benefits received.

04 January 2021