Liberalisation of WKR (Work Related Expense) scheme for SMEs

It will be permissible for employers from 2020 onwards to increase the level of tax-exempt allowances vis-à-vis their staff by up to 2,000 euros (each). The extra leeway will mainly benefit the SME sector.

The WKR scheme currently features a “free margin” of 1.2 percent of the wage bill for tax purposes within which allowances and disbursements may be distributed to employees on a tax-exempt basis. This is to be extended to 1.7 percent of the first 400,000 euros of the aggregate wage bill for tax purposes. It follows that under the new regime a 400,000 euro wage bill for tax purposes will enable the employer in question to give out up to 6,800 euros on a tax-exempt basis, compared with 4,800 euros under the current regime. The existing rate of 1.2 percent will continue to apply to the excess wage bill over and above the 400,000 euro maximum.

The allowance for filing an application for a Certificate of Conduct is to be added to the exemptions list.

The liberalisation of the WKR scheme has been conceived in consultation with representatives from the SME sector, as a flow-on from the 100 million euros the Cabinet earmarked in August 2018 for reducing the cost of labour in the SME sector.

Dutch version: Verruiming werkkostenregeling MKB