In the Dutch State Gazette of May 9, 2025 a Memorandum of Understanding as concluded by the Dutch and German Ministries of Finance that was issued on the occasion of the signing of the Protocol amending the Convention of April 12, 2012 between the Federal Republic of Germany and the Kingdom of the Netherlands for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income as amended by the Protocol of January 11, 2016 and the Protocol of March 24 2021, on April 14, 2025 was published.

It should be noted that these discussions will not only regard the tax consequences the teleworking might have for individual income tax purposes, but also the tax consequences such teleworking might have for corporate income tax purposes. Below you will find an unofficial English translation of the Memorandum of Understanding as published in the Dutch State Gazette of May 9, 2025.

“On the occasion of the signing on April 14, 2025 of the Protocol amending the Convention of April 12, 2012 between the Federal Republic of Germany and the Kingdom of the Netherlands for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income as amended by the Protocol of January 11, 2016 and the Protocol of March 24 2021 (Hereinafter: the amending Protocol) the Ministries acknowledge that additional efforts are needed to create more comprehensive solutions for mobile cross-border workers. However until now the Federal Republic of Germany and the Netherlands have not been able to reach an agreement on measures that go beyond the de minimis provision as agreed in the amending Protocol.

Therefore they have agreed the following:

The Ministries are determined to continue bilateral talks with a view to at the next opportune moment:

1. to find a more comprehensive solution for teleworking cross-border workers within the framework of the Convention for the Avoidance of Double Taxation, and
2. to issue guidelines on when cross-border teleworking constitutes a permanent establishment (‘permanent establishment home office’) and when it does not,

and declare that every effort will be made to achieve this goal.

This Memorandum of Understanding may be amended in writing at any time by mutual consent.

Either Ministry may terminate the cooperation based on this Memorandum of Understanding at any given moment. If possible, the other Ministry will be notified in writing one month in advance.

This Memorandum of Understanding does not constitute a treaty and does not create any rights or obligations under international law.

This Memorandum of Understanding will be signed in duplicate in the German and Dutch language on April 14, 2025 in The Hague, with both language versions being equivalent.

For the Ministry of Finance of the Federal Republic of Germany

N. Meyer-Landrut

Ambassador

For the Ministry of Finance of the Netherlands

I. Groot

Director of Consumption Taxes, Customs and International Affairs”

The text of the Memorandum of Understanding as published in the Dutch State Gazette (only the Dutch version was published can be found here.

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