The Work-Related Costs Scheme has been definitively implemented; as of January 1, 2015, only 1.2% of the total gross wage bill of the company can be spent on tax-free reimbursements to employees. In 2014, this was still 1.5%. Reimbursements above this 1.2% will be taxed with a final payroll tax of 80%. Everything the employee enjoys from the employment contract is considered wages. The legislator has taken a fairly strict approach in this regard. Certain reimbursements do not count towards this “free space” of 1.2% and can be designated as “exempt entitlement” (pension), “zero valuation” (workplace provisions), or “targeted exemption” (travel with own car at EUR 0.19 per kilometer or public transport, training and conferences (as long as there is no element of “relaxation” involved), professional literature. For providing, for example, laptops, iPads, and the like, the “necessity criterion” must be tested to determine if this can be tax-free. Overall, the Work-Related Costs Scheme represents a significant limitation on tax-free reimbursements, possibly resulting in employers being forced to “unilaterally” change previously tax-free (net) reimbursements.
