Work-related costs scheme required

We informed you in previously of this year via this web site that the work-related costs scheme was to be given compulsory status with effect from the first of January 2015, as a development which would put a stop to the optional regime for untaxed allowances and benefits from employers to employees which was first introduced in 2011.

The upshot of the new regime will be that any and all allowances and benefits to employees are to be regarded as wages where the work-related costs scheme is concerned. Then again the new regime features a free margin, a selection of specific exemptions and a zero valuation for a number of facilities (wages in kind) at the place of work.

! The transition to the (new) work-related costs scheme may call for adjustment of the terms of employment, which in turn will call for agreement being reached first with the work force, and with the Works Council if there is one.

! The essence of the “standard practice criterion” is that allowances and benefits may not significantly (by 30% or over) deviate from what would be customary in similar circumstances. This refers to the sum total of allowances and benefits having been designated as “final levy elements”. The standard practice criterion may in due course undergo further streamlining.