Some allowances, benefits and provisions can be provided or reimbursed tax-free to the employees. This article describes which allowances, benefits and provisions are involved and what the requirements are.
Specific exemptions (gerichte vrijstellingen)
An employer can provide a number of monetary reimbursements to the employees without tax liability. Those are called the specific exemptions. For most of the allowances these is a maximum amount that you can reimburse. If you reimburse a higher amount, the excess constitutes taxed wages for your employee. However, you can choose to indicate the excess as final levy wages in the work-related costs scheme (werkkostenregeling, WKR).
Beware: The exemption only applies if you have indicated the reimbursement in advance. No specific exemption applies without an indication. A free doctrine of proof applies to indicating. You must demonstrate that you have indicated the reimbursement.
You may provide fixed cost reimbursements for facilities that meet the necessity criterion (noodzakelijkheidscriterium), as long as you explicitly specify the requirements that these facilities must meet. You should also always do research to the actual costs beforehand. Fixed cost reimbursements for specific exemptions can only be granted if a (random) study into the level of the costs has been conducted beforehand.
The following reimbursements are specifically exempted:
- Costs incurred to pay for a certificate of good conduct (VOG)
- Travel allowances (up to a maximum amount per km, you can find the actual amount here)
- Subscriptions for travel with public transport
- Overnight stays due to temporary work elsewhere
- Business dinner with a customer
- Registration into the professional register (if registration is required by law or imposed by the profession)
- Costs of courses, conferences, etc.
- Business meals as a result of overtime / working during late night shopping / business trips
- For meals in canteens standard amounts are applied, no matter if it is a breakfast, lunch or dinner. The standard is even applied if the actual costs are lower than the standard amount. Here you can find the current standard amount for meals. The excess of the standard amount for meals is specifically exempt. The standard amount for meals must be added as wages in kind, net deducted or indicated as final levy wages in the work-related costs scheme (werkkostenregeling, WKR) or a combination of the three.
- Costs of outplacement
- Discount on own company products (you can find the maximum discount here)
- Study costs
- Professional literature
- Business moving costs
- Cell phones: the employer may provide a cell phone, computer, iPad or tools to an employee without tax liability if these are actually used for work. The employer determines which requirements the provision must meet. The provision may not the exchanged in the cafetaria model. These requirements are called the necessity criterion (noodzakelijkheidscriterium). If the employee does not need the provision anymore, he has to return it to the employer or pay the residual value.
- Tools, computers (notebooks and laptops), mobile communication tools etc. if they fulfill the necessity criterion. Also in this case applies that if the employee does not need the provision anymore, he or she has to return it to the employer or pay the residual value. The provision may not the exchanged in the cafetaria model. You can determine a budget to buy a phone for instance. If the employee wants a more expensive phone, it is allowed. In that case the employee must pay a personal contribution from his net salary.
Zero valuations (nihilwaarderingen)
A number of provisions or facilities are valued at zero. This means that they are not debited from the discretionary scope of the the work-related costs scheme (werkkostenregeling, WKR): You can provide them without tax liability. Zero valuations can only be applicable to wages in kind en not to monetary reimbursements (in contrast to specific exemptions). The employer continues to be the owner of the facility and if the employee does not need the facility anymore, he has to return it to the employer.
Examples of facilities that are valued at zero:
- Health & safety provisions at the workplace
- Health & safety provisions outside the workplace (e.g. a medical test)
- The use of a gym at the workplace
- Refreshments at work which are not part of the meal
- Furnishment of the workplace, not being the workplace in the employees own home
- Public transport card or discount card for public transport which is also used for business
- The interest benefit of a staff loan with which the employee buys a bicycle
- Uniforms or work clothing which are (almost) exclusively suitable for wearing during work or which are left at the workplace. Clothing that can also be worn outside working hours (with or without a logo) is not valued at zero. This applies, for example, to sportswear