Pilot taxed in the Netherlands if often an undesired outcome for the pilot it concerns. Tax treaties between countries can be different. This article is about the UK.
Pilot taxed in the Netherlands – court case
A Dutch national registered in the Netherlands who is considered a Dutch tax resident took up employment with an airline company in the United Kingdom.
In the year 2015 the pilot started in April and worked 136 days for the British airline and he flew 81 days international and the other days national.
In his Dutch income tax return the pilot reported his income and claimed a double taxation relief for roughly half the gross earned income. This double taxation relief the pilot based on the fact that there was a distinction in flights he has done locally in the United Kingdom and internationally.
The full double taxation relief was denied by the Dutch tax office. In appeal in court the pilot explained the distinction in flights. The court ruled that international traffic phrase in the tax treaty does not acknowledge a distinction, hence a distinction is not in place.
The second reason for appeal was that other tax treaties ruled differently where a pilot is being taxed. An unfair difference. The court is aware that other tax treaties have other agreements, but the tax treaty applicable in this case was the one with the United Kingdom.
Pilot taxed in the Netherlands – tax treaty
Tax treaties are agreements made between countries which country and tax what. All agreements are as much as possible in line of each other. Sometimes there is an article that differs and the pilot article is one of them.
In article 14 sub 3 of the UK NL tax treaty the income of the pilot is taxed in the Netherlands.
Pilot not taxed in the Netherlands – opportunity
Pilots that are employed in the Netherlands often are not that amused by the Dutch tax rates. These pilots then move their fiscal residence to another country such as Cyprus or Malta. Then the Dutch airline no longer needs to withheld tax, but social premiums are to be paid in the Netherlands. This exception we can request for you, if you are a pilot that is. Feel free to contact us.
We think tax-is-exciting but not everybody is very much excited about the Dutch tax rates. This pilot became creative in his tax return. He claimed a double taxation relief in 2015 and only in 2020 and many consultancy costs further the claim is finally denied.
Creativity is a virtue, but tax wise a nightmare. So please before you become too creative, contact us and we share our excitement or not over your thoughts.
Sorry for the dashes in the middle of the word tax-is-exciting. Apparently Google has a dirty mind and sees only a three letter word that we refer to when we practice to reproduce ourselves. Anything related to that word is spam, hence this devout solution.