The NS-Business Card allows your employees to travel on public transportation. All of their journeys are billed at the end of the month, including a VAT specification. So you do not need to request a VAT refund, which saves you time and keeps your administration simple.
Business travel expenses
You can always deduct VAT from business expenses, such as business travel expenses.
Commuting to and from work
The rules for commuting are different. You cannot always request a VAT refund for the expenses involved in commuting to and from work. Season tickets are considered to be a form of compensation or allowance. If the amount is less than € 227 per year, then you can request a VAT refund, but most season tickets cost more than this. This is all governed by the pre-tax Deduction Exclusion Decree (BUA). It is always a good idea to discuss your company's situation with your fiscal advisor.
This includes tickets for public transportation and the use of private vehicles, among other things. Private use of a company car by employees falls under the VAT regulations. For more information, visit the Tax Office website or consult with your fiscal advisor.
Payroll tax aspects
Employee benefit taxation (WKR)
As an employer, you must also deal with employee benefit taxation (WKR). The WKR determines how you deal with payroll taxes for all compensation and allowances to your employees. In principle, all compensation and allowances you provide to your employees fall under the category of payroll. But for each compensation or allowance, you can choose whether to allocate it as an employee benefit or as a cost of work, which is eligible for a flat-rate exemption of 1.2% of the total fiscal pay amount, also known as the cost of work budget. Everything that is paid above this 1.2% is taxed at the 80% deduction made at source, also known as the 'employer tax'.
Targeted exemptions are a number of explicitly indicated compensations and allowances. Pay in kind is subject to the Fair Market Value (WEV). This is equal to the invoice value including VAT, but there are a number of pay in kind elements that are valued at zero (zero value). These pertain to facilities that are used or consumed in full or in part at the workplace, and which are not posted to the cost of work budget. If the compensation is treated as employee pay, then the compensation or allowance is taxed to the employee, and the employer is responsible for declaring the amount to the Tax Office.
Take full advantage of the fiscal options
- All travel on public transportation, including private travel (in the event of more than sporadic use) fall under the targeted exemption scheme. So it is not necessary to use the cost of work budget to pay for your employees' mobility.
- You can compensate your employees who use public transportation to travel to work at the same rate as employees to travel to work using a different mode of transportation and receive € 0,19 per kilometre in compensation. This results in an equal treatment for your personnel. However, you must have a sufficient amount set aside in the cost of work budget.