COVID and the 183-day rule. Why could this be a problem for me?
The 183-day ruling, which is part of most bilateral tax treaties between the Netherlands and other countries, decides where you must pay tax on income received from work.
For example, you might have formal residency in Germany (i.e. you live in Germany) but work in the Netherlands. Beware! If indeed you are physically working for more than half of the year (more than 183 days) in this country, the Dutch tax office can levy tax on your income. The reverse is also true. If you live in the Netherlands (i.e. you are registered as a resident in the Netherlands), and you work for more than 183 days of the calendar year in Germany, you will owe taxes in Germany.
How does this affect my tax situation?
Due to the COVID situation requiring you to work from home, the 183-day ruling may apply to your situation if you worked more from your home country. Say you have formal residency in the Netherlands (i.e. you live in the Netherlands) but, due to COVID, you ended up working from the UK as of April 2020. If you worked for more than 183 days in the UK, during the Dutch tax year that runs from the 1st of January until the 31st of December, irrespective of your Dutch employer and your Dutch residency status, tax is due on your income to the UK tax office, HM Revenue & Customs.
This applies to my situation, but I have already paid income tax in the Netherlands. What should I do?
If the 183-day rule applies to your situation, then tax is due in the country you worked from. If you have already paid income tax in The Netherlands, e.g. through your employer, you can ask the Dutch tax office for a refund of taxes paid. A refund can be obtained through a regular income tax filing. Blue Umbrella would be happy to process this for you. View our income tax return page.