The headline is that the Dutch Government has no issue with KLM pilots evading Dutch income tax for KLM to qualify for the Covid 19 aid. Are these pilots tax evaders?
KLM pilots evading Dutch income tax
Pilots and crew on board of vessels and airplanes are specially addressed in the tax treaties the Dutch Government has with nations around the world. In some tax treaties it states that the pilot is taxed in the country where the airline company has its central point of command. In other tax treaties it states that the pilot is taxed in the country where the pilot is living.
When you are a pilot and your airline company is well established around the world, and you have the opportunity to live on Malta, in Spain or where you like. You simply hop on a plain to work, you work and you return to a country where tax rates can be more pleasant. Is that evading tax or using the opportunities the Dutch Government offers.
KLM pilots using opportunities offered by the Dutch Government
We do not think KLM pilots are evading Dutch income tax, we think KLM pilots have taken good notice of the Dutch tax treaties and executed them as stated in the agreement. Evading has a negative tone, but tax treaties have no negative tone.
If your employer offers you the possibility to live where you desire and this does not conflict with the work to be done, then the outcome could be that employees chose for a fiscal more friendly country.
KLM pilots – social premiums
KLM pilots and Dutch income tax options, are arranged by the tax treaties we have. A tax treaty is not a social premium treaty. For social premiums the main rule remains in place. The KLM pilot are obligatory insured for social insurance in the country where the employer is situated. Hence Dutch social premiums are still to be paid. If KLM pilots are for some reason dismissed, then the unemployment benefit is for them, they have always contributed to this system. No ‘evading’ in case of social premiums.
Tax is exciting – how can we assist this evading?
We are very enthusiastic about taxation and helping you paying less tax within rules and regulations is something we are keen to do. KLM pilots need a procedure to follow that makes it possible to disconnect the tax part from the social premium part and Tax is Exciting BV is happy to assist. Do not hesitate to contact us.