Payroll tax measures effective 2020
Adjustments to Work Related Expense Scheme
The Work Related Expense Scheme, or WKR as it is commonly referred to in Dutch, provides for the treatment in terms of payroll taxes of allowances and disbursements made available to employees by their employer. A total of four adjustments to the WKR scheme are included in the 2020 Tax Plan.
First, the free margin is to be raised to 1.7 percent of the wage bill for tax purposes subject, it should be noted, to a cap in the amount of 400,000 euros, over and above which the current free margin level of 1.2 percent will continue to apply.
Second, the reimbursement for the Certificate of Conduct is to come under a targeted exemption regime.
Third, the deadline for filing and payment of the final levy is to be extended. A final levy is rendered due and payable by the employer when the latter exceeds the free margin. In the current situation the final levy is to be filed concurrently with the tax return for the first reporting period of the next calendar year, which deadline it has now been proposed should be put back until the date of filing of the tax return for the second reporting period of the new calendar year.
Fourth, it has been proposed from next year onwards to fix the value of in-house products made available to employees at market value. In the current situation the value is sometimes fixed at the amount the employer would charge to third parties, with in-house products made available to employees qualifying for a targeted exemption of 20 percent of the product’s market value by way of a discount scheme.
Index-linking of tax exemption for volunteers
The option is available to volunteers to collect allowances and disbursements up to 170 euros per month, to a total of 1,700 euros annually, on a tax-exempt basis. The amounts in question will be subject to annual index-linking from the first of January 2020 onwards while the maximum for the calendar year as a whole is to be rounded up or down to a multiple of 100 euros.
Research and Development rebate
It has been proposed to increase the option for applying for an R&D certificate from three to four times annually and fix the deadline for filing applications at the final day before the start of the period to which the application relates rather than at one month or more ahead of the start of said term. An exception will be made for applications relating to the period commencing on the first of January of the new calendar year, registration for which should be seen to no later than by the twentieth of December of the old calendar year.
Addition for electric car
The regular addition to an employee’s taxable income for his or her private use of a company car currently amounts to 22 percent of the car’s list price. A discount applies to zero-emission cars. The discount scheme is to continue to apply after 2020, albeit in an amended form, in that the portion of the list price to which the discount on the addition applies is to be lowered, first to a level of 45,000 euros in 2020 and then on to its definitive level of 40,000 euros in 2021. The discount is to drop from its current level of 18 percentage points to 14 percentage points from the first of January 2020 onwards, with effect from which date a reduced discount of eight percent is to apply to a maximum of 45,000 euros overall. New electric company cars are to be liable for a 22 percent addition to the employee’s taxable income from the first of January 2026 onwards. The reduced addition will apply to the entire list price where the company car in question is hydrogen-powered.
Dutch version: Maatregelen loonbelasting 2020