On Budget Day 2023, the plans for the coming year were announced. We list the most important (tax) proposals from the Tax Plan 2024 for you. What might change for you?
Changes to payroll tax
Widening exemption for public transport season tickets and discount cards
For ov-subscriptions and benefit-hours cards (hereafter: ov-cards) a nil valuation currently applies if it is plausible that the ov-card is also used for business travel, including commuting. There is then no taxable benefit for the employee, even if the ov-card is used for private purposes.
If an ov-card is reimbursed or provided by the employer, other rules apply and a subsequent calculation must be made or the actual business expenses must be made plausible. If the business costs are less than the reimbursement or provision of the ov-card, then it is taxable wages for the employee.
The Tax Plan 2024 proposes that an employer, when reimbursing, providing and making available a public transport card, may apply a targeted exemption on the purchase costs provided it is plausible that the public transport card is also used (to whatever extent) for business purposes (including commuting). In all situations, there is then no taxable wage advantage and no subsequent calculation is required.
An additional condition currently applies to benefit-hour tickets, namely that the discount may be up to 50% for tickets outside the morning rush hour. This condition will no longer return. The only condition is that the employer can make it plausible that the employee also uses the public transport card (to whatever extent) for the proper performance of the employment, including commuting.
A considerable widening compared to the current regulation. Incidentally, the employer can also choose to reimburse not the full, but part of the purchase costs of the ov-card.
Increase untaxed travel allowance
The Tax Plan 2024 proposes to increase the maximum untaxed reimbursement for transport, including commuting kilometres, by two cents from €0.21 to €0.23 per kilometre. The untaxed travel allowance is a targeted exemption in the payroll tax and does not come at the expense of the WKR's free room.
Free scope working costs scheme (WKR)
In the Tax Plan 2023, the free margin for a wage bill up to €400,000 was temporarily increased to 3% to ease the burden on SMEs. From 1 January 2024, the free allowance will drop to the previously announced rate of 1.92%. Compared to 2022, this is an increase (from 1.7% to 1.92%).
Capping of 30% rule
Incoming employees coming to the Netherlands to work here are allowed a tax-free reimbursement (targeted exemption) of certain additional costs incurred due to temporary employment and residence in the Netherlands. These additional costs can be reimbursed on a claim basis, but it is also possible, under certain conditions, to apply for the so-called 30% rule with the Tax Authorities for this purpose. By applying the 30% rule, an employer can reimburse a maximum of 30% of the "wage" untaxed without further substantiation of the costs.
The salary over which the 30% rule can be applied is currently not capped. From 1 January 2024, the 30% rule will be limited to the remuneration norm for top officials in the Top Income Norming Act (WNT norm). In 2024, this WNT norm will be €233,000 on an annual basis. By adhering to this, a maximum of € 69,900 (30% of € 233,000) may be compensated untaxed within the 30% rule. Should this not be sufficient in an individual case, it is still possible to receive tax-free reimbursement of the extraterritorial costs actually incurred, instead of the 30% rule.
For employees for whom the 30% rule was applied over the last pay period (December) of 2022, a transitional arrangement has been made and the capping will take effect from 1 January 2026.
Like to know more about Tax Plan 2024?
Would you like to know more about the proposed changes and what this means for you? If so, please contact our specialists Angela Dinkelberg by e-mail or by phone: +31 88 277 13 66 or Martin Aandewiel by e-mail or by phone: +31 88 277 13 96. They will be happy to help you further.