Days of Physical Presence

(183-Day Rule)

By Robin Schalekamp and Kees de Graaf

If an employee works (in employment) in more than one country, or lives in a country other than the one he works in, both countries could have the right to levy taxes over his or her employment income. In order to avoid double taxation, the Netherlands has concluded treaties aimed at the avoidance of double taxation with a large number of countries. Most of these treaties have been drawn up in accordance with the OECD Model convention, which states that, in order to determine which country has the right to levy taxes over income from employment, it is sometimes necessary to count the number of days of physical presence in the country of employment.

In this article, the authors focus on the 183-day rule, and in particular, on whether a distinction should be made between working days and days of physical presence. A difference that can have a significant impact on your tax situation.

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