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Master Business Expense Compliance in The Netherlands

4 minutes reading time

 

While some aspects of business travel and expense compliance are common to most countries, some have their own specificities. The Netherlands, in this case, have particular aspects to business expense compliance which don’t exist elsewhere in Europe such as the WKR and home working allowances.

The main aspects of business expense compliance in the Netherlands include:

Below is a cheat sheet with all the important information you need to know to ensure compliant business expenses in the Netherlands.

Mileage allowances in 2022

The maximum tax-free mileage allowance in the Netherlands is € 0.19 per kilometre, regardless of the vehicle. Any allowance in excess of this amount will be considered as taxable income for the employee by the Dutch Belastingsdienst (tax and customs administration).

This maximum amount is set to increase to € 0.21 per kilometre in 2023. The proposed increase followed the sharp rise in energy prices in Spring 2022.

The full commuting rules and rates are available in the Handboek Loonheffingen.

Home working allowance in 2022

Due to the large number of people working from home since the pandemic, the government introduced a home working allowance on January 1st, 2022.

This allowance intends to compensate employees for the additional costs of working from home such as:

  • Utilities (water, gas, electricity)
  • Heating
  • Consumables (tea, coffee, toilet paper)

Employers have the option to pay their employees a tax-free allowance of € 2 per day that they work from home. Together, employers and employees can also agree on a fixed compensation based on the average number of days the employee spends home working each month.

Employees cannot cumulate a home working and commuting allowance for the same day.

Werkkostenregeling (WKR) or work-related costs scheme

The Dutch fiscal administration permits certain tax-free allowances, benefits in kind and provisions for employees within a discretionary scope.

The vrije ruimte (“discretionary scope”) of these allowances is calculated as a maximum percentage of the company’s entire salary costs.

Specific exemptions (gerichte vrijstellingen) and zero valuations (nihilwaarderingen)

Employers can reimburse certain expenses tax-free, regardless of the WKR. These include:

  • Costs related to furnishing a home office
  • Travel/mileage allowances stated above
  • Meals and overnight stays incurred in the course of doing business

Zero valuations are applicable only to wages in kind such as:

  • Work clothing
  • Refreshments consumed at work

All the above are not counted as part of the discretionary scope.

Daily Allowances (per diems)

Per diem rates are fixed and depend on the destination and duration of travel. As with most countries, per diems are not considered salary and thus not taxable for employees up to the maximum set amount.

Domestic daily allowance rates in 2022

  • Incidental expenses
    • Small daily expenses: € 5.64
    • Small evening expenses: € 16.82
  • Meal expenses
    • Breakfast: € 11.27
    • Lunch: € 17.44
    • Dinner: € 26.39
  • Accommodation, excluding breakfast: € 115.36

Daily allowance rules

For an employee to receive any of the above allowances, their business trip must last a minimum of four hours.

A breakfast allowance is due only for overnight trips. I.e. no breakfast allowance is due for day one of a multiday trip.

Evening allowances are only due if the trip includes an overnight stay. The full evening allowance may only be paid for the first eight consecutive evenings. Following this, the evening allowance is halved.

As always, an employee will not receive a meal or accommodation allowance if either was paid for by the employer or another third-party.

Find the full list of rules on the Dutch website of Internal Affairs.

Foreign daily allowance rates in 2022

Foreign allowance or per diem rates vary based on the country of destination and are available on the CAO Rijk website. These are also tax-exempt and meant to cover the cost of meals and incidental expenses for an employee travelling for business.

Digitalisation and digital archiving

Digital archiving of paper receipts is legal in the Netherlands. Therefore, scanned receipts have the same validity as their paper counterparts as long as the legibility, integrity and authenticity of the receipts is ensured.

The tax authorities may request access to the stored electronic data or demand either hard copies or electronic copies.

When digitalising paper receipts, companies must transfer the data must completely and correctly. When scanning a document, for example, all pages (front and back) and attachments must be scanned and retained for seven years. If authenticity features such as colours, logos and watermarks cannot be digitalised, another measure must be used to prove the document’s authenticity.

For more information on fiscal digitalisation, see the Dutch government’s documentation on automated administration and tax retention obligations.

VAT recovery

Companies abiding by Dutch regulations can apply for foreign VAT recovery. They can choose to either submit their own recovery claims, or appoint a VAT reclaim partner to do it for them.

Some of the most commonly eligible expenses for VAT recovery include:

  • Hotel stays
  • Car rentals
  • Conferences and events
  • Training
  • Marketing.

With many customers active in the Netherlands, Mobilexpense has mastered the country’s business expense compliance requirements. Our Compliance Department monitors regulatory news from 70+ countries and updates the solution accordingly. From per diems to commuting allowances and integrated VAT reclaim, we guarantee our customers peace of mind and hassle-free expensing.

Whether you are a Dutch company or a multinational active in the Netherlands, Mobilexpense has the right expense solution for your business needs.

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Posted on 12 Sep 2022

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