As of January 1 st , 2015 the so called “Werkkostenregeling” is an obligation within the Dutch tax laws. The “Werkkostenregeling” is in Dutch abbreviated as WKR. From 2012 to 2014 there was a transitional arrangement for the WKR. The WKR is a Benefits Taxation Scheme (BTS)
The BTS is a new regime for assessing taxability of employee benefits and will replace the current regulations. The BTS involves all possible employee benefits and compensations including expense allowances and benefits in kind. The basic rule for the BTS is that all employment related reimbursements and provisions are considered taxable wage as long as no exceptions apply.
The BTS grants employers a “Tax Free Budget” of 1.2% of the annual taxable wages of all employees. If the total amounts of allowances exceed the tax-free budget of 1.2%, the excess will be subject to payroll tax of 80% payable by the employer.
To determine what benefit is taxable you can follow the next steps:
For more information regarding the Benefits Taxation Scheme contact your advisor at Expatax.
1 Specific rules for each benefit are applicable
2 Contact your advisor for more explanation regarding the Necessity Criterion.
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