COMPLIANCE
one another’s decisions, the successive courts agreed that Articles 15(1) and 15(2) serve different purposes and rely on different counting methods. This resulted in the Supreme Court narrowing their determination of applying the 50 / 50 simplified travel rule squarely on Article 15(1). For more on STBVs, see the following link from Tolley’s Global Mobility Employment Taxes, United Kingdom, at: https://ow.ly/OpUJ50WQgmU * . Observations for payroll and mobility teams While the Dutch case establishes a specific rule under Dutch law, it offers broader value as a comparison point. For UK payroll and mobility professionals, it may be useful to: l review how travel days are currently sourced for treaty purposes, particularly under Article 15(1) l consider how those sourcing methods align or diverge from how HMRC guidance approaches similar travel scenarios l stay alert to how other jurisdictions interpret travel-day attribution, especially where STBV agreements are in place l revisit internal training and documentation to ensure teams understand the distinction between income sourcing under Article 15(1) and presence counting under Article 15(2). Education is protection The Dutch Supreme Court ruling doesn’t override UK rules, but it does illustrate the complexity of applying Article 15(1) in a globally consistent way. It also highlights a common pitfall: treating all treaty days alike. For UK payroll professionals, the key is vigilance and proper guidance. Understand what part of the treaty applies. Identify which rules relate to sourcing income and which to presence-based exemption. And remember that day-counting logic is never universal. This isn’t just a technicality. It’s the difference between clean compliance and costly error. n
Short-haul travel (journeys under seven hours) UK day treatment Morning departure Non-UK workday Afternoon departure UK workday Morning arrival UK workday Afternoon arrival Non-UK workday
Long-haul travel (journeys over seven hours)
UK day treatment
Morning departure
Non-UK workday
Afternoon departure
½ UK, ½ non-UK
Morning arrival
½ UK, ½ non-UK
Afternoon arrival
Non-UK workday
ow.ly/1tRl50WmQ6X), HMRC accepts a simplified international travel-day formula whereby days are apportioned depending on the length of journey, and the departure and arrival times, as detailed above. Employers are expected to adopt a method which reasonably reflects the facts, and they’re expected to support it if questioned. For example, travel which simply gets someone into position to perform duties is treated differently to a day when duties are carried out. This is HMRC’s distinction between incidental UK presence, such as transiting through an airport and substantive duties, such as attending meetings or delivering work. Unlike the Dutch 50 / 50 model, the UK approach is flexible but cumbersome. It allows for case-by-case judgment, which helps accommodate different facts, but also creates risk if day attribution isn’t applied consistently. These risks become more visible when different countries take different approaches to the same travel day. Mismatch risks for UK payroll Differences in how countries apply Article 15(1) can lead to misaligned income attribution. One country may tax a day in full while the other treats it as partially or entirely non-taxable. UK guidance doesn’t set a fixed rule under Article 15(1) for travel days, but HMRC generally expects the
approach to reflect the substance of duties performed. However, the simplified blanket 50 / 50 approach by the Netherlands may be too inflexible, leading to mismatches if both sides treat the same day differently for sourcing purposes. Day counting for Article 15(2) HMRC’s approach to day counting under Article 15(2) is even stricter than for income sourcing. This part of the OECD Model sets conditions for exempting employment income in the host country, often used in short-term business visitor (STBV) contexts. Unlike Article 15(1), which allows for some flexibility, Article 15(2) uses a strict presence-based test. UK guidance is clear: any part of a day spent in the UK counts as a UK day. Please see: https://ow.ly/ vMSK50WmQ9F. That includes weekends, travel days, public holidays and even sick days. There’s no concept of split or half-days under Article 15(2). Confusing the presence- based counting used here with the income sourcing logic under Article 15(1) can lead to incorrect treaty relief or misreporting, particularly under Appendix 4 and Appendix 8 frameworks. This same distinction was repeatedly emphasised throughout the Dutch goalkeeper coach lower court proceedings. Notwithstanding that they each overturned
How Article 15(1) and 15(2) differ: a quick reference guide
Feature
Article 15(1) – sourcing employment income
Article 15(2) – 183-day exemption for STBVs
What it does
Allocates salary based on where work is done
Exempts income from tax in host country if criteria met
What it measures
Where duties are performed (including travel)
Days of physical presence in host country
Day-counting rule
Can split days (e.g. 50 / 50 or time basis)
Any part of a day counts as one full day
Payroll relevance
Impacts sourcing and treaty relief claims
Drives STBV exemption and Appendix 4 eligibility
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| Professional in Payroll, Pensions and Reward |
Issue 113 | September 2025
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