This information is for drivers who live in the Netherlands and work for a German transport company. Both the professional driver and the transporter employing a cross-border worker have to deal with the legislation of more than one country. The information below relates 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, countries have concluded agreements, including 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 employerâ€™s domicile and the actual type of occupation as a driver also play a role in this.
If it is a question of posting or temporary work, further information is required.
The driver drives exclusively in Germany
If the driver only drives in Germany, taxes are only levied in Germany. The driverâ€™s employer is obliged to pay the wage tax that is due under German law to the German tax authorities. No tax is due in The Netherlands. However, the German income is taken into account in the Netherlands in the so-called â€œprogression provisoâ€. The driver does not have to pay taxes in The Netherlands on his wages because he does not have a Dutch employer. He has to make a declaration in the Netherlands if he has other income or if he and his partner want to deduct mortgage interest on his partnerâ€™s income.
If the driver falls under German tax legislation, he is a foreign taxpayer. Under certain conditions, he can file a return in Germany and be treated the same as domestic taxpayers. This is called unlimited tax liability. This can have advantages.
As a resident of the Netherlands, the driver naturally remains liable to pay taxes there. And because the income often consists only of wages, he does not pay tax in the Netherlands.
For the assessment of social security, EU Regulation 883/04 is applicable. Because in this case the employee only works in the Germany, he is also covered by social security there. The employer must therefore pay social security contributions to the health insurance fund.
The driver drives throughout the EU
If the driver is travelling in several countries in the EU, the right to collect taxes is divided. In Germany, 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 the Netherlands or another country, the country of residence, the Netherlands, 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, no tax is levied in the Netherlands on the part of the salary, apart from the part relating to Germany. In this case, an exemption is granted in the Netherlands. The employee is responsible for paying tax on this part in the EU member state concerned. The German employer cannot pay income tax for this employee in the Netherlands. This means that the employee has to register with the Dutch tax authorities at his place of residence and inform them of the estimated amount
of wages to be paid in the Netherlands and countries other than Germany (if less than 183 days are worked there) in the year. In this case, the Dutch tax authorities will issue a monthly provisional assessment (voorlopige aanslag), which will be offset against the tax return at the end of the year.
In principle, the driver remains liable to pay income tax in Germany. However, if practically all (more than 90%) of his work is done outside Germany, no income tax is withheld in Germany. However, he must declare the (remaining) income that he receives for activities performed in Germany in his income tax return.
If the driver is partially taxed in the Netherlands, he must take into account that he is not entitled to tax benefits such as tax class 3 in Germany. He is no longer an unlimited taxpayer.
In principle, the driver is covered by social insurance in Germany because the employer is based in Germany. The contribution is levied on worldwide income. This means that the employer has to pay social security contributions to the health insurance fund for the driverâ€™s entire income.
If the driver works 25% or more in the Netherlands, the social security obligation switches to the Netherlands. In the case of international drivers who drive different routes every year, this can mean that their insurance obligation changes regularly. The German employer must be aware of this and be prepared to pay social security contributions to the Dutch tax authorities according to Dutch law.
See too â€˜Working in several countriesâ€™.
The driver drives exclusively in the Netherlands
Because the driver does not work in Germany, he does not pay taxes in Germany. The taxes are paid in The Netherlands.
If the driver only drives in the Netherlands, he is covered by social insurance in the Netherlands. The German employer must register with the tax authorities in the Netherlands and pay the social security contributions due under Dutch law.
The driver mainly drives outside the Netherlands and Germany
Taxes are levied in the country where he works more than 183 days per year. In this situation, no tax is levied in the Netherlands on this part of the salary either, in addition to the part relating to Germany. 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 oneâ€™s own income or the income of a spouse with whom the person concerned files a joint return has been generated there. From a German perspective, if the driver performs more than 90% of his activities abroad, only German income must be declared in the return.
If the driver does not work more than 183 days in one country, the entire salary is taxed in the Netherlands.
Because the employer is based in Germany, the driver is covered by social insurance in Germany.
Of course, you can also get information from an adviser at a GrenzInfoPunkt.