From January 1, 2015 the Work Cost Rule is applicable for all employments. In this rule is determined what costs can be paid tax free to the employee, what costs can be paid with 80% end wage tax and what costs are regular salary. How about the car and parking?
Company car
A company car is processed as regular salary. That implies the applicable percentage of the new catalogue value is added to the income, unless the employee can proof not to drive more than 500 km per year for private use. Costs related to such a company car are paid by the employer without those being regarded a salary component. Including parking costs.
Non company car
Non company cars, private cars of the employees for which the employer has provided parking space are treated differently. There is made a difference between parking in the company building and external parking rented by the company.
Internal parking facilities will not result in the costs being part of the taxable salary, but only under the condition these parking places have not been rented separately. For instance, if the company is situated at a World Trade Centre, then the company rented office space and has the opportunity to rent separately parking space. This parking space will result in taxable salary for the employee.
In the example where the company rented a building that includes parking, if this parking is used by the employees for their private vehicles, then this will not result in taxable salary. This is a practical solution to a difficult question, the question being: what is the value of that parking place? This question can be skipped, by making it a tax free event.
Consequence of parking costs and Work Cost Rule
The consequence is that company cars provided by the employer should use outside parking facilities, as these costs are paid by the employer and will not result in a taxable salary with the employee. This creates, if applicable, tax free parking for non company cars at the site of the employer.
Article by Arnold Waal Orange Tax Services
Work Cost Rule: parking
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