As things stand at present, the tax deduction for training expenses is set to be abolished with effect from 1 January 2020. What will replace it?
Lifelong Development (LLO)
In a letter In a letter to Parliament, the Government states that it will focus on Lifelong Development (LLO). The government is responsible for establishing the framework conditions. Every Dutch citizen is personally responsible for their own continuous development and long-term employability in the labour market. Employees and jobseekers must proactively keep their skills up to date. They must invest in opportunities and development and contribute to a positive learning culture.
Learning accounts
The Government intends to introduce learning accounts. These could be individual learning accounts, which every Dutch citizen can use as they see fit for their education and development. These learning accounts can be funded by the employer.
In addition, there will be collective learning accounts. These are learning and development budgets, funded either through collective labour agreements or from public funds. The budget for this comes, amongst other things, from the abolition of the tax deduction for training expenses.
The Government is to investigate whether it is possible to develop a digital overview of the individual training opportunities available to every Dutch citizen. In due course, this overview should be linked to the appropriate financial support. This will enable everyone to see, via their own web portal, which training opportunities are still available to them.
Tax
Contributions made by the employer to an individual or collective learning account are not (yet) classified as pay. Naturally, this will depend on the specific structure of the learning account.
However, as soon as the balance in the study account is used, it is treated as pay. The specific exemption for study costs may apply to this. This is an existing specific exemption. This exemption relates to the reimbursement or provision of costs in connection with:
- maintaining and/or improving the knowledge and skills required to perform the job (maintaining existing knowledge and skills);
- undertaking a course or degree programme with a view to earning an income from work and securing accommodation (acquiring new knowledge), excluding costs relating to work and study space, as well as travel expenses in excess of €0.19 per kilometre;
The intention is that employees should be able to transfer their learning account to their new employer at the end of their employment. Naturally, this transfer will not be subject to payroll tax.