Taxes for international drivers


This information is for drivers who live in Germany and work for a Dutch transport company. Both the professional driver and the transport company employing cross-border workers have to deal with the legislation of more than one country.

The information listed below refers to taxes and social security. However, we would like to point out that the place where social security is compulsory often differs from the place where tax is compulsory. In addition, the tax assessment does not depend on the regulations regarding the employment contract or labour law.

Each country has its own national tax laws. In order to prevent double taxation, corresponding agreements have been concluded, such as those between the Netherlands and Germany. Basically, the place where the occupation is carried out is decisive for the question of which tax law applies. However, for professional drivers who have a “mobile workplace”, the tax law of the country of residence remains applicable if they do not work abroad for more than 183 days a year. In this case, the income is divided between several countries for tax purposes. The employer’s domicile and the actual type of occupation as a driver also play a role here.

If it is a question of posting or temporary work, further information is required.

Do you drive exclusively in the Netherlands?

Taxes

If the driver only drives in the Netherlands, taxes are only levied in the Netherlands. The driver’s employer is obliged to pay the wage tax that is due under Dutch law to the Dutch tax authorities. No tax is due in Germany. However, the Dutch income is taken into account in Germany in the so-called “progression proviso†if the driver files a tax return together with his spouse. As a result, tax is levied on the German income (of the spouse) on the basis of a higher rate. The driver does not have to pay taxes in Germany on his wages because he does not have a German employer. He has to make a declaration in Germany if he has other income.

If the driver falls under Dutch tax legislation, he is a foreign taxpayer. Under certain conditions, he can file a return in the Netherlands and be treated the same as domestic taxpayers. This means qualified foreign tax liability. This can have advantages. For example, to be able to deduct mortgage interest or to have the partner file a tax return in the Netherlands in order to apply for tax reductions.

As a resident of Germany, the driver naturally remains liable to pay tax there. And because the income often consists only of wages, he pays no tax in Germany.

Social security

For the assessment of social security, EU Regulation 883/04 is applicable. Because in this case the employee only works in the Netherlands, he is also covered by social security there. The employer must therefore pay social security contributions to the tax authorities in addition to wage tax.

Do you drive exclusively in Germany?

Taxes

Because the driver does not work in the Netherlands, he does not pay taxes in the Netherlands. The taxes are paid in Germany.

Social security

If the driver only drives in Germany, he is covered by social insurance in Germany. The Dutch employer must register with the responsible German authorities (pension insurance institution, health insurance fund) and pay the social security contributions due under German law.

Do you drive throughout the EU?

Taxes

If the driver is travelling in several countries in the EU, the right to collect taxes is divided. In the Netherlands, tax is only levied on the part of the wage that relates to the days on which the driver actually drove there. For the days on which the employee was driving either in Germany or another country, the country of residence, Germany, has the right to collect taxes. There is one exception to this rule, namely in the case where the work is performed in an EU member state for more than 183 days per year. In this situation, tax is also not levied in Germany on the part of the salary, in addition to the part relating to the Netherlands. In this case, an exemption is granted in Germany. The employee is responsible for paying tax on this part in the EU member state concerned. The Dutch employer cannot pay wage tax for this employee in Germany. As a result, the employee himself must register with the German tax authorities at his place of residence and inform them of the estimated amount of wages
to be paid in the year that relates to Germany and countries other than the Netherlands (if less than 183 days are worked there). In this case, the German tax authorities will issue a provisional assessment on a quarterly basis, which will be offset against the tax return at the end of the year. No forms are required for this.

In principle, the driver remains liable to pay wage tax in the Netherlands. However, if practically all (more than 90%) of his work is done outside the Netherlands, no wage tax is withheld in the Netherlands. However, he must declare the (remaining) income he receives for activities performed in the Netherlands on his income tax return.

If the driver is partially taxed in Germany, he must take into account that he is not entitled to tax benefits in the Netherlands, such as the deduction of mortgage interest and tax benefits from the tax reduction. He is no longer a qualified foreign taxpayer.

Social security

In this case, the driver is in fact covered by social security in the Netherlands because the employer is based in the Netherlands. The contribution is levied on worldwide income. This means that the employer has to pay social security contributions to the tax authorities for the driver’s entire income.

If the driver works 25% or more in Germany, the social security obligation switches to Germany. In the case of international drivers who drive different routes every year, this can mean that their insurance obligation changes regularly. The Dutch employer must be aware of this and be prepared to pay social security contributions under German law to the health insurance fund to which the employee belongs in Germany.

Also visit ‘Working in several countries’.

Do you mainly drive outside the Netherlands and Germany?

Taxes

Taxes are levied in the country where he works more than 183 days per year. In this situation, no tax is levied in Germany on this part of the salary, in addition to the part relating to the Netherlands. The remaining amount is divided between the Netherlands and Germany. The taxpayer has to register with the tax authorities of the country where he mainly travels. In Germany, only a declaration for income tax has to be submitted if one’s own income or the income of a spouse with whom the person concerned files a joint return has been generated there. From a Dutch perspective, if the driver performs more than 90% of his activities abroad, only Dutch income has to be declared in the return.

If the driver does not work more than 183 days in one country, the entire salary is taxed in Germany.

Social security

Because the employer is based in the Netherlands, the driver is covered by social insurance in the Netherlands.

Further information

Taxes:

www.belastingdienst.nl
www.finanzamt.nrw.de

Social security:

www.dvka.de
www.svb.nl/bdz
www.deutscheâ€rentenversicherung.de