An employer can still contribute tax-free to an employee fund even under the work-related costs scheme. Distributions to employees from this fund will then also remain tax-free. However, some conditions apply.
Conditions
The conditions for this tax-friendly scheme are:
- In any case, the fund has a separate bank account. There are no other formal requirements, making a visit to a notary, for example, unnecessary.
- The employees have collectively contributed at least as much to the fund as the employer each year for the last five calendar years.
- Employees have no legally enforceable right to receive benefits from the fund.
- The benefits and benefits in kind do not cover expenses such as sickness and disability.
Example
If the personnel fund is used in this way, distributions from the fund are tax-free. For example: the employees of a company jointly pay €1,000 per year to a personnel fund. The employer also contributes €1,000 per year. The fund can then finance tax-free outings or Christmas hampers for employees for the entire amount. If the employer himself gives employees €1,000 worth of outings or Christmas hampers, this does constitute a taxable benefit.
Note! The fund must be independent. Does it turn out in practice that in fact the employer makes the decisions in the fund then distributions from the fund are no longer tax-free!