The rules on customary pay will be tightened from 1 January 2015. In many cases, this means a mandatory salary increase for the director-major shareholder (dga). The Lower House recently agreed to the proposed tightening (the Upper House has yet to agree).
Stricter rules
As a DMS, in 2015, you will have to test your salary against stricter rules to assess whether your salary is customary. Your salary must be set at least at the higher of the following amounts:
- 75% of the salary from the most comparable employment; or
- the highest salary of the other employees employed by the bv or related companies (bodies); or
- € 44.000.
Your salary may be set lower even with the stricter rules, but you must be able to make this plausible.
Relaxations
Initially, the intention was to extend the group of affiliated companies to companies from which the PLC can enjoy benefits through the participation exemption. That extension was reversed by the Lower House. Only a company in which your bv has at least one-third interest (or vice versa) is considered an affiliated company.
The House of Representatives also made another clarification on the burden of proof. If the tax inspector finds that 75% of pay from the most comparable employment is higher than the pay you enjoy, he will have to make this plausible with objective criteria. For example, the industry, size of the company, work package and responsibilities.
Agreements on the customary pay scheme
If your customary wage is higher than €44,000 and you have made agreements with the tax authorities on this, this agreement will expire as of 1 January 2015. It has been approved that you may take a salary equal to 75/70th of the 2014 salary provided the facts and circumstances remain the same. That approval runs until the Tax Inspector contacts you for a new customary pay arrangement or until the time when the original customary pay arrangement would lapse.
Tip: If, in your opinion, the 75/70th increase results in your 2015 customary wage being set too high, contact us for a proper reconciliation.