Zeeland-West Brabant District Court has ruled that a staff outing organised by an advertising agency does not fall within the scope of a specific exemption from payroll tax.
Free space
In its payroll tax return, the advertising agency included the costs of the staff outing within the discretionary allowance. At the time (in 2018), this amounted to 1.2% of the taxable wage bill.
This concerns a trip to Lanzarote. The costs for the 30 employees’ flight tickets, accommodation, meals and activities amount to €44,420. The advertising agency paid income tax on the amount by which the tax-free allowance was exceeded (€35,060) (at the final levy rate of 80%).
Directed exemption
In its appeal, however, the advertising agency argues that the specific exemption for temporary accommodation in the context of employment (including meals) applies. The Court, however, ruled that the employer had not demonstrated that the trip was predominantly of a business nature.
The trip was an anniversary trip (and had been announced by the celebrations committee). The programme did not include the business-related activities cited by the advertising agency (presentations and team-building). Employees were not paid for the weekend days during the trip. The business nature of the dinners, lunches and wine tasting could not be substantiated.
Nor was the employer able to justify the application of the specific exemption for study and training. The activities undertaken during the trip were, in particular, of a general and recreational nature.