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Work related costs scheme – mobile devices

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As of January 1, 2015 all Dutch employers fall under the obligatory work related costs scheme. This scheme provides to employees tax free expense reimbursements and allowances if the total yearly payments remains under 1.2% of the payroll costs of the company.

Some costs are reimbursement under the 1.2% facility, some are salary some are excluded from wage tax.

The employer can issue to the employee a mobile device such as a smartphone or mobile phone. If these devices are used for at least 10% for business, the value of the devices is not regarded to be a salary component. These devices can be provided tax free.

The employer can issue to the employee a computer which also can be mobile, such as a e-reader, pocket-pc, laptop, mini notebook or navigation utility. The rule is that when these devices are used for at least 90% for business, these devices can be issued tax free.

You do not need to have studied 4 years tax law to see the next question coming: is a tablet a computer device or a mobile device. In other words, does the 10% or 90% requirement apply?

For this answer the tax office issued the following reply: If the screen of the device does not exceed 7 inch in diagonal, it is a mobile device under the 10% requirement. Bigger screens are computer, hence the 90% use for business requirement applies.

Today we learned that some companies who issued large numbers of tablets to their employees argued this difference between devices in the court of law. The court of law decided that this difference between devices cannot be applied, hence all mobile devices used for at least 10% of the time for business use can be issued tax free to the employees. Employers that already paid the tax for the devices, can claim back the too much paid wage tax.

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