Allowances, benefits in kind and provisions
You are allowed to spend a maximum of 1.2% of your total taxable wage (the 'discretionary scope') on tax-free allowances, benefits in kind and provisions for your employees. In addition, you are allowed to reimburse, issue and provide certain items without tax liability, by way of specific exemptions and nil valuations.
You pay wage tax in the form of a final levy of 80% on the amount in excess of the discretionary scope.
Specific exemptions are applicable to a number of allowances, benefits in kind and provisions. These are exemptions at employee level for specific costs incurred by your employee. These specific exemptions include, for example, allowances, benefits in kind and provisions for extraterritorial costs, transport, meals and overnight stays for courses, congresses, studies and training courses. These exemptions are usually governed by maximum amounts. Specific exemptions are not debited from your discretionary scope.
If allowances, benefits in kind and provisions exceed the maximum amounts, then the excess constitutes taxed wages for your employee. However, you can also opt to indicate this as final levy wages. When you do not include (part of) the excess in your employee's wages then the excess is debited from your discretionary scope.
A number of provisions are valued at zero, for example work clothing or refreshments at work. These zero valuations avoid the situation in which provisions at the workplace would be debited from the discretionary scope. These 'zero valuations' are not debited from your discretionary scope. Zero valuations are applicable solely to wages in kind, usually in the form of provisions, and not to monetary reimbursements. If you provide a facility, you continue to be the owner of this facility.