The DTT leads to a modernization of the allocation of tax rights between Germany and the Netherlands. In addition to numerous formal amendments, the new residency and procedural provisions (subject to tax clause, correspondence and activity test) are particularly relevant from the German point of view. The Federal Department of Finance assumes no responsibility for errors or omissions in the texts of the contract made available here. The officially published versions in the Bundesgesetzblatt are still the relevant texts. Bulgaria Bulgarian and International Tax Conventions The taxation of capital gains from the sale of shares in real estate companies has been amended under the DTT. In general, these capital gains are taxed in the state where the property is located when more than 75% of the company`s assets are made up of real estate. Capital gains generated by the sale of shares in Dutch propcos holding German real estate are not affected, as Germany has the right to tax these profits under national law only if the Dutch company PropCo is headquartered in Germany. Since, for commercial tax reasons, Dutch propCos generally does not have an administrative place in Germany, Germany cannot tax the profits from the sale of PropCos. The Netherlands and Germany are important trading partners in their bilateral relations. The number of shops between the Netherlands and Germany is almost nowhere else in the world. It is increasingly common for Dutch and German companies to operate in the same markets to exploit their growth potential. Workers in Germany and the Netherlands, particularly in regions along the German-Dutch border, are increasingly mobile in the international labour market and are more likely to work across the border. In situations where money is earned in another country where the worker lives, taxation is threatened.

The new Netherlands-Germany tax treaty defines the country that can tax income from the other country or income from the other country. The new tax treaty replaces the old tax treaty of 1956. The content of the new tax treaty aims to meet international standards applicable to OECD bilateral tax treaties. The aim of the new treaty is to prevent double taxation and double non-taxation by abuse. The fight against contractual abuses between the Netherlands and Germany was a central element for Germany during the negotiations. The main point of the Netherlands was the improvement of the position of the Dutch border worker and the Dutch director/majority shareholder. The contract with Germany determines which country is entitled to tax different types of income from employment and capital income. In addition, the treaty contains rules on the prevention of double taxation, the procedure for mutual agreement, the exchange of information and the assistance of tax collection. The Netherlands has set up a unilateral compensation scheme for Dutch border workers employed in Germany.

The new version of the Double Taxation Convention for the Netherlands and Germany will come into force on 1 January 2016. The new tax treaty between the Netherlands and Germany is entitled „Treaty between the Kingdom of the Netherlands and the Federal Republic of Germany aimed at avoiding double taxation and preventing income tax evasion“. International tax law includes all legal provisions that include foreign-related tax matters.