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The 183-Day Rule
How do you determine which country has the right to tax, and how do we monitor this in practice? Introduction
This document covers the 183-day rule: the rule that determines which country may levy tax on the wages of a professional who works in a different country from the one where they live. It builds on the knowledge document on foreign suppliers and goes deeper into how we monitor this rule in practice, including what must happen when the 183-day limit is (about to be) exceeded.
After working through this document, you will be able to:
- explain what the 183-day rule entails and who it applies to;
- name the three conditions under which the professional’s country of residence may levy tax;
- explain how we check this in practice, both in advance and during the assignment;
- know what must happen if the 183-day limit is (about to be) exceeded.
1. Who does this rule apply to?
The 183-day rule does not apply to foreign self-employed persons whose business is comparable to a Dutch sole proprietorship (eenmanszaak). It applies to employees of a foreign company. This can also include a self-employed entrepreneur who is employed by their own foreign company (for example, a Limited or a BVBA).
2. What is the 183-day rule?
The 183-day rule determines which country has the right to tax: in which country must tax be paid for the employee, in order to prevent double taxation?
As a rule of thumb, the country where the work is performed also has the right to tax. However, if someone lives in a different country from where they work, this would lead to double taxation without further arrangements. To prevent this, tax treaties have been concluded between European countries, with rules that determine whether the country of residence or the country of work may levy tax.
An example
Suppose a professional lives in Germany and is employed by a German company, but works in the Netherlands. In principle, the Netherlands would then be allowed to levy tax: the employer would have to pay tax in the Netherlands for the work performed in the Netherlands, and in Germany for the work performed in Germany. That is double taxation.
How does the rule work?
If the professional stays in the Netherlands for fewer than 183 days, the salary is paid by the German employer, and that German employer has no permanent establishment in the Netherlands, then Germany may levy tax.
Important: what counts is physical presence in the Netherlands, not just days worked. Does the professional come to the Netherlands for a weekend or a holiday? That counts. Does the professional come to the Netherlands to go shopping? That counts too.
3. How do we check this in practice?
A Dutch tax year runs from 1 January to 31 December. This is the period in which we track how often a professional has been present in the Netherlands. We therefore ask professionals to indicate on which days they have been in the Netherlands.
In advance: “Statement of past presence”
As soon as it is known, while setting up the assignment, that someone is using the 183-day rule, the “Statement of past presence” form must be requested. On it, the professional states how many days, before the assignment, they have already been present in the Netherlands in that same year. These days count towards the 183-day calculation.
To do this, manually add the STP step “183 days earlier this year” and link the form to it by attaching it to the client.
Afterwards: “Registration 183 days”
During the assignment, we ask the professional to complete the “Registration 183 days” form every 3 months, stating on which days in the past 3 months they were present in the Netherlands. This form cannot be downloaded via Striive or Netive and must therefore be sent by email.
This form must be reviewed and approved by contract management. Before approving, add up all days from all forms received for that year to determine how many days the professional has already been present in the Netherlands that year.
4. Exceeding the 183 days
Has the professional gone over 183 days according to the most recently received form? Then the following must happen:
- Contact the supplier. The supplier must now apply for a payroll tax number (loonheffingennummer) and a G-account (G-rekening) in the Netherlands, and pay payroll taxes in the Netherlands retroactively, from the first moment the professional was present in the Netherlands that year.
- Request an auditor’s statement as proof of this, issued by a Dutch RA or AA accountant. Change the indemnification (vrijwaring) from “183 days” to “auditor’s statement”.
- Inform the supplier in writing that payments will be blocked until the auditor’s statement has been received.
- Link the received auditor’s statement to all outstanding steps, if several steps are open.
- Arrange future payments via the G-account. To do this, split the contract per quarter and set the indemnification on the follow-up contract to “G-account”. Point out to the supplier that payments for the new quarter can only be made once the G-account has been received.
Near-exceedance
Has the 183-day limit not yet been reached, but is it expected to be reached in the coming quarter? Then follow the same steps as above.
No exceedance
Is the 183-day limit nowhere near in sight? Then the step can simply be approved.
5. Why this is relevant to us
- This is an ongoing control process, not a one-off check: the 183-day count must be tracked throughout the entire tax year, not just at the start of an assignment.
- The consequences of exceeding the limit are significant: retroactive effect to the start of the year, a new payroll tax number, a G-account, and blocked payments until everything is in order.
- Timely signalling prevents bigger problems: by acting even in the case of a “near-exceedance”, we avoid having to make retroactive corrections afterwards.
- Link to other knowledge documents: this topic belongs to the broader group of cross-border compliance topics, alongside the A1 certificate and the posted worker regulations.
6. Glossary
| Term | Explanation |
|---|---|
| 183-day rule | Rule that determines which country has the right to tax the wages of a cross-border employee, based on days of physical presence in the country of work. |
| Right to tax (heffingsrecht) | The right of a country to levy tax on an employee’s wages. |
| Permanent establishment (vaste inrichting) | A durable place of business in a country; whether there is a permanent establishment in the Netherlands is relevant to the 183-day rule. |
| Statement of past presence | The form requested in advance to establish how many days the professional has already been present in the Netherlands that year. |
| Registration 183 days | The form requested every 3 months during the assignment to track days of presence. |
| Indemnification (vrijwaring) | The status indicating the basis on which the client is protected from liability (for example “183 days” or “auditor’s statement”/”G-account”). |
7. More information
This document is not tax advice. If you are unsure about a specific situation, or if the 183-day limit is (about to be) exceeded, contact contract management or Legal.