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Frank has a Master in Tax Economics from Erasmus University of Rotterdam, and has been tax adviser since 1989. Having started a career with big eight companies, he was a partner in a small The Hague tax advisory firm for six years. This firm merged with Deloitte’s, but after two years Frank continued his existing practice independently. This practice involved a wide variety of clients, from quoted real estate investment companies to elderly people's income tax returns; assistance with Dutch tax audits to expansion of domestic business abroad; setting up Dutch branches of foreign businesses to full compliance on behalf of expatriate employees in the Netherlands. Having been an editor of 'Expat News' until it went off the air, Frank has provided solutions for many out-of-the-ordinary situations and often shortcut bureaucracy for numerous cross-border labour situations.
In 2013 Frank joined the Expatise Faculty and teaches International Tax Law.
Generally, any employee with a local employment contract is considered a taxpayer over the income from that employment (wages) in the country of his/her residence (resident taxpayer) and must, in principle, pay taxes and social security contributions over those wages.
In many cases, the employer with whom the employment contract was concluded (the formal employer) will be obligated to withhold these taxes and contributions from the wage in the payroll: the employer then becomes a withholding agent for payroll taxes. This means that this person or organisation must withhold an advance on taxes and contributions from the wages and pay this to the Tax Administration. Once the fiscal year has ended, the advance payment will be adjusted with any payable taxes by the employee over their income.
For any domestic employment relation, this is a clear system. However, for cross-border employment activities, matters become more complicated. After all, multiple countries may be involved when work is being performed beyond national borders, each with its own tax and social security schemes it wants to utilize by levying taxes and contributions over wages that can be connected to that country. There is a risk of double taxation and withholding of contributions, as well as the risk that these payroll taxes are paid in the wrong country.
The key to determining where employment income will be taxed and which country will be primarily responsible for avoiding double taxation is the Place of Fiscal Residence vis-à-vis the country of work.
In other words, it is paramount to check where the employee is “at home” and where work is performed.
However, it is important to note that each country has its own interpretation of Fiscal Residence. Moreover, within that national framework, there are several levels on which the concept of Residence can play a role, each with its own criteria for determining the Residence:
- municipal registration obligation;
- national tax law;
- tax treaties/ conventions to prevent double taxation;
- national social security schemes;
- European Regulations regarding social security;
- bilateral treaties regarding social security.
In this Week's Webinar, Frank de Bats will take you through the Dutch Concept of Fiscal Residence and explains the pivotal role HR Global Mobility plays in gathering relevant information for determining the place of Fiscal Residence.
Meet the lecturers
International Wage and Income Tax
This is a complimentary webinar for members of the Expatise Linkedin Learning Platform.
Registration via learning@expatise.academy