Netherlands: 2024 Budget day developments (and beyond)

In brief

Each year, the third Tuesday of September marks Budget Day ('Prinsjesdag') in The Netherlands. While the outgoing Dutch cabinet has to limit its activities only to matters deemed 'non-controversial', the 2024 Tax Plan still shows numerous changes (and some surprises) in the field of employment taxes.

This client alert describes the government's most notable plans from a Dutch wage/income tax and social security perspective. In addition to the plans themselves, the alert describes several other recent and relevant developments in this field.


Contents

Wage tax

Work-related costs scheme amendments

The cabinet intends to make the following changes to the Dutch Work-related Costs Scheme (WKR) as per 1 January 2024:

Simplification of the tax-free provision of public transportation

The current regulation on tax-free provision of public transportation within the WKR is particularly difficult. Among other things, it requires employers to make complex calculations after the fact, to prove the business purpose of an employee's use of a public transport card. These calculations should ensure that the difference is taxed between (a) the costs incurred via the public transportation card and (b) the actual cost of the business travel.

Not only are these calculations complex, they also often lead to a higher amount of tax due (especially in case of teleworking). Therefore, the Dutch government has proposed a new specific tax exemption for 2024, concerning the reimbursement of a public transport card. This exemption applies in case the employees use the public transportation card for business purposes (including commuting) to any extent. The simplified rule also aims to encourage the use of public transport for both business and private purposes. 

Click here to access the full alert.


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