On 14 April 2025, the Netherlands and Germany took an important step toward improving remote work opportunities for cross-border workers.1 The two countries agreed to amend the tax treaty so that cross-border workers can work from home for up to 34 days per year without having to pay taxes on their income in both countries.
WHY THIS MATTERS
This amendment is intended to ease the tax burden and reduce administrative overhead for cross-border workers who regularly work from home.
Tax Treaty and Cross-Border Remote Work
A tax treaty prevents cross-border workers from being taxed on the same income in both the country where they reside and the country where their employer is located. Generally, employees pay income tax in the country where the work is physically performed. If cross-border workers work from a different country than where their employer is based, taxing rights may also be granted to that other country. 
This means that taxes may have to be paid in the country of residence for the portion of income earned from remote work, as well as in the employer's country for the remaining portion of the income.
More Details and Key Advantages of the Amendment
Under the new arrangement in the Netherlands–Germany Tax Treaty, taxing rights for up to 34 remote workdays per year are retained entirely by the employer's country, with a remote workday defined as a day on which more than 30 minutes are worked from home. This amendment is significant because prior to its introduction, employees might have been required to pay taxes both in their country of residence for the income earned through remote work and in the employer's country for the rest of their earnings, starting from day 1 of remote working. Now, it is possible to work remotely for up to 34 days without facing such tax obligations.
KPMG INSIGHTS
This amendment provides greater clarity and reduces administrative burdens. This is beneficial for cross-border workers, as they only need to declare their income in the employer's country, reducing uncertainty about their net income. Additionally, extra administrative burdens, such as complex tax calculations, are reduced.
Looking Ahead: Future Discussions
Although the amendment is a positive development, not all cross-border workers will benefit from it. Employees who work from home for more than 34 days per year on a regular basis fall outside this arrangement. Therefore, the Netherlands and Germany have signed a declaration of intent to continue discussions on a more comprehensive remote work arrangement. The goal is to eventually allow more than 34 work-from-home days per year and to provide employers with greater certainty about the tax implications of remote work.
MEIJBURG & CO INSIGHTS
Next Steps for Implementation
Before the amendment to the tax treaty takes effect, the proposal must be approved by the Council of State (‘Raad van State’) and the Dutch parliament (‘Staten-Generaal’). The German parliament must also agree to the change. Once adopted, this amendment will mark a significant milestone in cross-border employment relationships, fostering a more adaptable work environment.
An assessment should be made of the affected cross-border workforce. Employers with questions about this amendment or how it might affect their situation, should consult with their qualified cross-border tax professional or with a member of the People Services team with Meijburg & Co in the Netherlands (see the Contacts section).
FOOTNOTE:
1 See on the Dutch government website: Nieuwsbericht, "Nederland wijzigt belastingverdrag met Duitsland voor grenswerkers" (14-04-2025).
RELATED RESOURCE
This article is excerpted, with permission, from "Enhancing Remote Work Opportunities: Amendment to the Netherlands-Germany Tax Treaty" (11 April 2025), a publication of the KPMG International member firm in the Netherlands.
Contacts
More Information
Disclaimer
The information contained in this newsletter was submitted by the KPMG International member firm in the Netherlands.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2025 Meijburg & Co is a partnership of limited liability companies under Dutch law, is registered in the Trade Register under number 53753348 and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.