New tax treaty between the Netherlands and Germany

As of the first of January 2014, the new double tax treaty between the Netherlands and Germany is expected to enter into force. This may have consequences for Dutch residents working in Germany with owner-occupied property in the Netherlands.

Based on the current tax treaty between the Netherlands and Germany, residents of the Netherlands who have owner-occupied property in the Netherlands and work in Germany are not able to deduct their mortgage interest on their Dutch property from their German income. 

However, the new double tax treaty provides for a compensation of this previously non-deductible interest; a Dutch resident with income from Germany will no longer be treated differently than a Dutch resident with income from the Netherlands with respect to the deduction of mortgage interest. 
Other changes include a change in the tax position for “cross-border” directors. 

If you would like further information as to how the new treaty may affect your tax position, please do not hesitate to contact us for more information.