Payroll tax volunteer scheme
The volunteer scheme in the Wage Tax Act (Wet op de loonbelasting, Wet LB) may apply to volunteers who perform activities for your organisation and receive financial compensation or reimbursement in kind. This financial compensation could consist of a travel allowance or another cost reimbursement. Reimbursements in kind might include meals, gift vouchers, clothing or a course. Mazars will be happy to enlighten you about this volunteer scheme.
Conditions of the volunteer scheme
Although a volunteer may receive a tax-free allowance, there are conditions attached. An allowance to cover actual, reasonably incurred costs can be paid tax-free. However, the organisation must keep the supporting documents (receipts) in its records. Under the volunteer scheme, it is also possible to pay a tax-free allowance without receipts. In that case, the allowance may not exceed €150 per month or €1,500 per year (for persons aged 22 years or over). However, it is important that the people in question are genuine volunteers, not people working in a fictitious employment relationship for a PBO, a sports organisation or a body that is exempt from corporate income tax.
The volunteer scheme only applies to work that is not performed as an occupation. This provision means that the volunteer cannot be paid a market-based wage. In any event, if volunteers receive less than €4.50 an hour (or €2.50 an hour for those under the age of 23), they are not being paid a market-based wage.
For example: If a volunteer has worked for 10 hours and been paid €120 (a market-based wage) for that work, this fact means that the volunteer scheme might not apply. Although the amount is less than €150 per month, the wage per hour may be too high to qualify for the volunteer scheme.
The maximum amounts (€150/€1,500) apply to the total remuneration package. It is therefore not possible to apply the volunteer scheme if a travel allowance is paid or a reimbursement in kind, such as a care package, is handed out in addition to an allowance of €1,500.
If a volunteer has performed work for multiple organisations and has in total received more than the maximum amounts, this circumstance must be declared in the volunteer’s income tax return.
Want to know more?
If you want to find out more about the volunteering scheme, you can contact Martin Aandewiel by email or by phone on +31 (0)88 277 1396. He will be happy to assist.