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Unilateral tax credit

Unilateral relief is usually relevant where no treaty exists. In these circumstances, the Decree on the prevention of double taxation 2001 applies.

The Decree gives a domestic exemption from wage tax on foreign work of up to 30 consecutive days. Under Article 30 an employee residing in the Netherlands is exempt from wage tax relating to wages received by them to which Art 9(1)(b) applies, and which is subject to tax on income paid by the other country.

Article 9(1)(b) and (4) applies to taxable wages in respect of the performance or having performed work within the territory of the other country for less than 30 consecutive days. Foreign tax must have been actually paid on that income for this exemption to apply.

If tax is suffered in a foreign country with which no treaty exists, then the Netherlands will give a deduction in the resident individual's Dutch income tax return in the Netherlands to avoid double taxation. (belastingdienst.nl)

Double tax treaties

Double taxation treaties are drawn up to protect a government's taxing rights and