Obtaining an exemption decree for Dutch wage tax is not obligatory. In case a Dutch employer has an employee who is living and/or working outside of the Netherlands, under conditions, there may be no liability for Dutch wage tax and/or premium.
The tax treaty for the avoidance of double taxation, as possibly agreed between the Netherlands and the residence state of the employee, will give clarity on which country may levy tax on (part of ) the salary of the employee. Premium liability is however not discussed in the tax treaties, there are EU guidelines on premium liability as well as a limited number of premium treaties which the Netherlands has entered into.
Although the employer is not obligated to request an exemption decree at the tax office, in case in a qualifying situation no wage tax is withheld, it may however give additional certainty to the employer. Only in case the employer is aware of the fact that such decree has been granted by the tax office on false grounds, the employer can liable for possible additional Dutch wage tax assessments. An exemption decree for Dutch wage tax is in principle valid for a period of ten years.
We can assist and advise on the possible tax exemption of employees and, if so required, handle the decree request procedure with the Dutch tax office.
