The 183-day rule originates in Article 15(2) of the OECD Model Tax Convention and appears in substantially similar form in most of the Netherlands' bilateral tax treaties. It provides that employment income earned by a resident of one contracting state working in another state remains taxable only in the residence state, provided three cumulative conditions are met: the employee is present in the host state for no more than 183 days in the relevant period, the remuneration is paid by an employer who is not a resident of the host state, and the remuneration is not borne by a permanent establishment of the employer in the host state.
The counting period varies by treaty. Older treaties count 183 days in the calendar year; more recent treaties following the post-2000 OECD Model count 183 days in any 12-month period starting or ending in the fiscal year concerned. This distinction is significant: a short assignment bridging two calendar years may breach the threshold under one counting method but not the other.
Compliance with all three conditions is required simultaneously. Employers must track not only physical presence days but also cost-attribution. If the employer charges the host-country entity for the employee's salary, the third condition fails regardless of the day count, triggering host-country withholding obligations.