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Written by:
Marcel Frazer


COVID-related payroll tax measures

Customary salary for director-cum-controlling shareholder

The payroll tax for which holders of a substantial interest who perform work for their own company (and who thus have director-cum-controlling shareholder status) are liable is calculated on application of the “customary wage” criterion. This criterion may be departed from where the financial year 2020 is concerned where the business in question has suffered a COVID-related decline in sales. In view of the tenacity of the COVID-19 (or SARS-CoV-2) pandemic it has now been decided to make it permissible for 2021 as well for directors-cum-controlling shareholders to apply a reduced customary wage when calculating their payroll tax liability. The 2021 measure differs from its 2020 counterpart in two respects, in that

  • 2021 sales as a whole are to be compared with 2019 sales as a whole, and
  • a 30 percent minimum is to apply to the decline in sales suffered in 2021 compared with 2019.

Travel allowance, Work Related Expense scheme and working from home

The authorisation under which existing fixed travel allowances qualify for tax-exempt reimbursement has been extended until the first of April 2021 including where the travel expenses have not been incurred (in their entirety) because the employee in question for COVID-related reasons has been working from home, all of this with the general proviso that it should have been prior to 13 March 2020 when the employer in question awarded his or her employee the latter’s permanent travel allowance.

Similarly to 2020, the free margin forming part of WKR, the Work Related Expense scheme, has been raised from 1.7% to three percent for the first 400,000 euros of the wage bill. The Cabinet is exploring the options for supplementary schemes to be made available for the tax-exempt reimbursement of expenses of a working-from-home nature.

Administrative obligations

Additional deferral of particular administrative obligations of a withholding tax nature has been granted until 30 June 2021.

Frontier workers

The arrangements having been agreed upon between the Netherlands of the one part and Germany and Belgium of the other where it concerns the taxation of frontier workers and the exemption from taxes of particular German (net) social security benefits have been prolonged by another three months until 30 June 2021.

Dutch version: Coronamaatregelen loonheffingen

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