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Brief explanation regarding the taxation of employee benefits in 2015 - the WKR

Published on: Fri, Oct 16, 2015 at 4:33 PM | Viewed: 779 times.

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:

  1. The benefit or payment can be tax free if it is meant for:

    1. employers contribution for an additional disability or widow / orphans insurance 1
    2. 1 month’s net salary in case of a 25-or 40-year service time anniversary 1
    3. payment from an employee charity fund 1
    4. participation of a congress , course or seminar
    5. work related study costs
    6. commuting allowance 1
    7. meals during missions 1
    8. professional literature 1
    9. health & safety services or tools 1
    10. small refreshments in the workplace 1
    11. employee loan for a mortgage or bicycle 1
    12. intermediate costs 1
    13. extra territorial costs (30% rule) 1

  2. Is the benefit or payment meant for a “tool” such as laptop, tablet or smart phone that is given to the employee and is the “Necessity Criterion” applicable, no taxation is applicable.

  3. The benefit or payment is always taxable if it is meant for

    1. a traffic fine of the employee
    2. free housing on the company premises

  4. The “Tax Free Budget” is applicable if (amongst others) the payment or benefit is meant for

    1. party or after office drinks outside the office or company
    2. fitness outside the office or company
    3. gifts with a value that exceeds € 25
    4. non-work-related meals
    5. Parking costs private car
    6. union membership fee
    7. private health insurance
    8. travel allowance that exceed € 0.19 per kilometer

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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