Due to the coronavirus measures, many Belgian and Dutch cross-border workers work from home, in their country of residence. This may have consequences for the applicable tax rules. On 30 April 2020, Belgium and the Netherlands therefore concluded an agreement clarifying the situation of cross-border workers in the context of the COVID-19 health crisis.
Home working days
A Belgian resident who is employed in the Netherlands is, in principle, taxable in the Netherlands on the remuneration he receives for that employment. The same rule applies to a Dutch resident who is employed in Belgium.
As a result of the measures taken by the Dutch or Belgian governments to combat the COVID-19 pandemic, many Belgian and Dutch cross-border workers are working from home.
Belgium and the Netherlands have therefore agreed that, for salaried cross-border workers, these home working days may be treated as days worked in the country where the workers would normally have worked, provided that these home working days are taxed in the other country.
This fiction cannot be applied to working days that the cross-border worker would have spent working from home or in a third State, independently of the measures to combat the COVID-19 pandemic. More specifically, it is not applicable to cross-border workers who, in accordance with their employment contract, generally carry out their employment from home.
There is no obligation to apply the fiction. Workers do not necessarily have to choose for this derogatory treatment. Home working days may also continue to be treated as days actually worked in the country of residence.
Cross-border workers who do use the fiction are obliged to apply it consistently in both Contracting States and to keep the necessary data (e.g. a written confirmation from the employer indicating which part of the home working days was carried out exclusively because of the measures related to the COVID-19 pandemic).
These agreements between Belgium and the Netherlands in any event apply from 11 March 2020 until 31 May 2020. They will be renewed on a monthly basis after 31 May if the Netherlands and Belgium agree.
Staying at home without working with continued payment of wages
If the worker is obliged to stay at home without working but continues to receive wages, the wages remain taxed during this period in the country where the worker would have worked under normal circumstances.
Staying at home with entitlement to Belgian temporary unemployment benefits
Dutch residents working in Belgium who are unable to work due to measures to combat the COVID-19 pandemic are entitled to Belgian temporary unemployment benefits under certain conditions. These unemployment benefits may be taxed in the country where the worker would have worked under normal circumstances. The usual employment pattern before the corona crisis is therefore important in this respect.
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If you have any questions about the agreement concluded between Belgium and the Netherlands, please contact our Legal Partners by email on firstname.lastname@example.org or by phone on 02/549.30.20.
Source: Notice FPS Finance, Belgium-Netherlands Double Taxation Treaty: agreement between competent authorities on homework carried out during the COVID-19 health crisis.