Staff discounts less straightforward from 2027
A tax exemption is being scrapped, meaning employers may have to process their discounts differently.
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Staff discounts on groceries, clothing, electronics and services will no longer automatically be tax-free from 1 January 2027 if the cabinet proposal is adopted. Employers can still include the discount in the tax-free allowance under the work-related costs scheme.
Employees can currently receive discounts of up to 20 per cent on their employer’s products or services, subject to certain conditions, with a maximum of €500 a year. Under the proposal, that separate exemption for staff discounts will be scrapped from 1 January 2027.
The discount can still be provided tax-free through the tax-free allowance under the work-related costs scheme. However, that allowance is limited and is also used for other reimbursements and benefits for staff. Once the allowance has been used up, the employer must pay a final levy on the excess.
According to the Dutch government, the rate of that final levy is 80 per cent. Employers may therefore choose to limit or adjust discounts, or set them out differently in the terms and conditions of employment. In some cases, the discount may form part of a collective labour agreement or contract, meaning consultation may be required before changes are made.
The scheme affects a range of sectors. For shops, it may concern discounts on products; for airlines, tickets; and for financial service providers, insurance or advice. The direct effect will vary by employer, depending on the size of the tax-free allowance and the value of the discount.
The change has not yet been finalised. Ondernemersplein states that the Lower House (Tweede Kamer) and Upper House (Eerste Kamer) still have to consider the proposal. The text may change in the meantime, but employers can already prepare for the possible administrative and employment-terms consequences.
One story, several perspectives
What is established
- The cabinet proposes scrapping the separate tax exemption for staff discounts.
- Subject to certain conditions, discounts can continue through the tax-free allowance under the work-related costs scheme.
- The proposal still has to pass both Houses.
Left
Arguments Tax benefits for employees of large companies can have unequal effects. A simpler scheme and a more level playing field matter more than retaining a specific employment benefit.
Values Equality, progressive taxation and protection of public revenue.
Consequences The measure may limit tax avoidance, but employees may lose a benefit.
Centre
Arguments Simplification is desirable, but the transition must remain workable for employers and employees. Existing collective labour agreements require clarity and timely adjustment.
Values Practical implementation, legal certainty and balance between employee and employer.
Consequences A transitional arrangement or clear implementation rules could prevent unexpected effects on incomes.
Right
Arguments Employers should be able to decide for themselves which benefits they offer staff. New tax restrictions make employment conditions more complicated and may make it harder to attract and retain employees.
Values Free enterprise, freedom of contract and low administrative burdens.
Consequences Employers may scrap discounts or pass the costs on to employees.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
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The tax percentages, amounts and proposed start date have been checked against government sources. The text explicitly states that parliamentary consideration still has to take place.
- confirmed The separate exemption will be scrapped under the proposal from 1 January 2027. — Mentioned by Ondernemersplein and the Dutch government. source
- confirmed The current exemption is 20 per cent, up to a maximum of €500 a year. — Stated on Ondernemersplein. source
- confirmed The final levy is 80 per cent. — Stated by the Dutch government and Ondernemersplein. source
Editor's note
This is a cabinet proposal, not legislation currently in force. The precise consequences depend on parliamentary consideration and on the tax-free allowance available to each employer.Sources
- Werkkostenregeling eenvoudiger met aanpassing belastingvrije personeelskorting — Rijksoverheid
- Personeelskorting niet meer standaard belastingvrij — Ondernemersplein
More on this in Dutch media
- De Telegraaf — „personeelskorting werkkostenregeling”
- Trouw — „personeelskorting werkkostenregeling”
- RTL Nieuws — „personeelskorting werkkostenregeling”