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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.
In principle, income that arises from employment is subject to income tax and social security contributions in the country where the work is performed. Depending on the tax and social security regime of the country involved, the employer may be required to set up a payroll administration for this employee and calculate whether income tax and/or contributions are due. If, indeed, due, the employer must withhold an advance payment on the income and pay it to the government. This advance payment is called payroll tax.
This payroll tax calculation and withholding system creates a heavy administrative burden for the employer, let alone when multiple work countries are involved and, as a result, multiple payroll compliance requirements apply, as is the case with cross-border Hybrid Work (Telework).
In cross-border Hybrid Work cases, the employee has a usual place of employment in one country but also works in another. This can be temporary, e.g. when sent on an assignment or business trip, but also permanent, e.g. when allowed to work from home abroad. These situations can easily result in taxability in both countries. After all, in principle, employment income arises in both countries and thus is subject to the payroll tax regime in both countries.
Being taxable in multiple countries not only bears the risks of high additional payroll compliance costs. It can also lead to being double-taxed and dissatisfied employees, which may lead to additional salary costs for the employer who decides to compensate for the employee’s loss. On the other hand, NOT allowing the employee to work from home abroad and avoiding additional compliance and salary costs may lead to reputational damage for the employer.
In this Week’s Webinar, Frank de Bats will show, based on a real-life hybrid work example, how payroll taxes are calculated and the effect of payroll compliance on the employer's tax liability.
The webinar starts at 4 pm CET and consists of a 30-minute presentation followed by answering questions and discussions.
Meet the lecturers
International Wage and Income Tax
