Measures for employers - 2021 Tax Plan
28 september 2020 | Door: Matthijs van Dorssen
The government is aiming on continuance and stimulating of jobs. The new Job related investment tax credit will give an exemption on payroll taxes from January 1st 2021. With this tax credit investments are encouraged. Retraining of former employees will also be stimulated. As a result the percentage of the Work-related investment scheme will be lowered.
Job-related investment tax credit (BIK)
From 2021 a job-related investment tax credit (BIK) will make it more attractive for companies to make investments. If companies invest in operating assets, they will be allowed to deduct a percentage of these investments from the payroll tax/national insurance contributions they have to pay. Further details will be announced by the government at a later date.
Work-related expenses scheme
Restriction of fixed budget for wage bills from € 400,000
Since 1 January 2020 a two-band system has applied to the fixed budget under the work-related expenses scheme (WKR):
- Up to a wage bill of € 400,000 the fixed budget is 1.7% (in 2020 this is temporarily 3%).
- From € 400,001 a fixed budget of 1.2% applies.
This percentage will be lowered from 1.2% to 1.18% with effect from 2021. The rate applicable in the first band will remain at 1.7%.
If the allowances and benefits in kind exceed the fixed budget, a final levy of 80% is payable.
Is it possible that the allowances and benefits in kind you grant will exceed the fixed budget next year (wage bill of more than € 400,000) and are you in a position to bring them forward? If so, you can save tax by applying the 1.2% rate this year instead of 1.18% in 2021.
Specific exemption for retraining
As a result of the current crisis, the government is placing an even greater emphasis on the importance of training. From 2021 the specific exemption for training will also apply to allowances and benefits in kind granted for training arising from previous employment. This means that from 2021 onwards employers will be able to reimburse the training costs of former employees free of tax. Training costs are currently regarded as a wage from earlier employment and the employer is required to pay payroll tax on them. This relaxation of the rules will apply to allowances and benefits in kind granted for the purpose of following a training programme or course of study with a view to generating income.
Tax treatment of bonuses paid under COVID-19 Bonus for Healthcare Professionals Subsidy Scheme
Healthcare institutions can award employees and non-employees (e.g. self-employed persons and external cleaning staff who are hired in) a tax-free bonus of € 1,000.
The healthcare institutions must include this bonus in the fixed budget under the work-related expenses scheme and it is regarded as a final-levy component. As a result, no tax is levied on the employee and the payment is made net. This also means that the bonus does not reduce the employee’s entitlement to allowances.
In the case of non-employees, however, this approach was not possible. Consequently, under the Tax Plan this option has now been made available to non-employees too. The final-levy rate has been set at 75%. This is the same rate applicable to benefits in kind with a value of more than € 136 granted to non-employees.
The healthcare institution can submit an application for the bonus to the Minister of Health, Welfare and Sport. The bonus, including the final levy payable, will then be refunded to the healthcare institution.
Temporary bridging scheme for flexiworkers
The temporary bridging scheme for flexiworkers is now being put into law. Under this scheme, subject to certain conditions, flexiworkers were able to apply for a contribution of € 550 per month for March, April and May 2020. The bridging scheme was intended for flexiworkers whose income fell in April, compared with their income in February, as a result of the coronavirus crisis.
Life-course savings scheme
Until 2012 employees had the option of saving for a life-course savings benefit. When the life-course savings scheme was abolished it was specified that employees with an entitlement under such a scheme exceeding € 3,000 on 31 December 2011 could make use of transitional arrangements. These transitional arrangements will end on 31 December 2021. This means that if the life-course savings benefit has not been paid out in the form of a wage by 1 January 2022, the value of the credit will be taxed.
The transitional arrangements have come up against practical problems and are therefore being amended as follows:
- The institution administering the life-course savings scheme will become the withholding agent for payroll tax at the fictitious moment of payment (the moment when it is assumed that the remaining life-course savings benefit is paid out).
- This fictitious moment of payment is being brought forward. If the benefit has not been paid out in the form of a wage by 1 November 2021, the fictitious moment of payment will be 1 November 2021.
- The institution will not take tax credits into account. These can be claimed by the employee in his/her income tax return. The tax credit for leave under the life-course savings scheme is one of these.