… is on the horizon for many employers. After all, most employers began applying the work-related expenses scheme (WKR) on 1 January 2015, whether actively or not. From that date onwards, this became a legal requirement. In the first tax return period following 2015 (i.e. the return for January 2016 or for the first four-week period of 2016), payroll tax must be paid on the amount by which the designated allowances and benefits in kind exceed the lump-sum allowance for work-related expenses (also known as the free space) in 2015. The available allowance amounts to 1.2% of the 2015 wage bill.
Of course, it is exciting to see whether the calculations and estimates made at the end of 2014 are correct. Will the WKR flat-rate limit be exceeded? Or, on the contrary, is there still some leeway left? In either case, in the time remaining until the turn of the year 2015–2016, measures may still be taken to optimise the use of the WKR. And, if necessary, to adjust the policy for 2016.
Whether justified or not, the Tax and Customs Administration appears to be adopting a fairly strict interpretation in the implementation of the WKR when it comes to the point in time at which the employer must have made the decision to designate a wage component as a WKR final levy component. This strict interpretation is certainly open to considerable legal debate, but most employers are not keen on that. They would be well advised to check – or have someone check – before the end of 2015 whether their WKR affairs are in order.
For employers who have already been applying the WKR on a voluntary basis, there is some news – in addition to the fact that a single WKR settlement at the end of the year is sufficient. For 2015, for the first time, the group scheme shall be applied. Under this scheme, the discretionary allowance of all withholding agents belonging to the group is aggregated. Only if the total of the salary components designated for the discretionary allowance by all withholding agents belonging to the group exceeds 1.2% of the total wage bill of all withholding agents belonging to the group, must payroll tax (80%) be paid. This payment must be made by the group entity with the highest total wage bill, but all other group entities are jointly and severally liable for it. The group comprises all (small) subsidiary companies in which a stake of 95% or more has been held throughout the entire calendar year. If the group scheme is opted for, all companies that meet this criterion are obliged to form part of the WKR group.
If you would like to find out more about the work-related expenses scheme, we would be happy to send you our detailed briefing on this subject. To do so, please contact your point of contact or info.nijmegen@vwg.nl/info.wijchen@vwg.nl.