Results of evaluation

The most important findings of the evaluation relate to the administrative burden, the adequacy of the fixed exemption and the necessity criterion.

Administrative burden
Most of the employers saw no increase or decrease in the time spent as a result of the introduction of the WKR. If a difference in the time spent was noticeable, then this concerned an increase, in particular in the case of large enterprises.

Adequacy of the fixed exemption
On the basis of the 2015 and 2016 returns for payroll taxes it was established that 3% to 4% of the businesses had to pay a final levy as a result of exceeding the fixed exemption. The excess was on average 0.4% of the payroll, which was mainly due to staff parties and company anniversaries.

Necessity criterion
The introduction of this criterion has had little effect. What is striking is that only 22% of employers appear to be familiar with the fact that it exists. According to intermediaries and tax inspectors, the introduction of the necessity criterion has simplified matters.

The government response

The government’s impression is that employers try to use the specific exemptions and nil valuations as much as possible. The government regrets that the WKR is not perceived as lessening the administrative burden. To avoid causing any additional increase in the administrative burden, the government only wants to make minor adjustments in order to simplify some aspects of the WKR and sees no further reason to expand the rules in a budgetary sense, given that by far the majority of employers remain within the fixed exemption. According to the government, the necessity criterion is working properly. The evaluation does not see any reason to expand its application.  

What does this mean in practice?

No major changes to the WKR are proposed for the foreseeable future. Simplifications that will shortly be discussed with the business sector involve:

  • doing away with the obligation to designate reimbursements and provisions that are specifically exempted as part of the final levy;
  • allowing employers to determine the benefit of provided meals by way of a random sample;
  • reintroducing a standard interest rate for staff loans in order to clearly determine the salary benefit;
  • providing more clarity in the Payroll Taxes Manual about employees’ own contribution in relation to the necessity criterion.

One or more of the abovementioned possibilities that have a good chance of success will be elaborated on in legislation and regulations.