Employees escape computer tax bill

1st April 2004, Comments 0 comments

1 April 2004 , AMSTERDAM — The 40,000 workers at threat of an unexpected tax bill due to changes to the tax-free home computer scheme have been spared at the last minute.

1 April 2004

AMSTERDAM — The 40,000 workers at threat of an unexpected tax bill due to changes to the tax-free home computer scheme have been spared at the last minute.

Finance State Secretary Joop Wijn said on Wednesday that workers who bought a computer with fiscal support before 1 January 2004 will not be subjected to the new regulations, news agency ANP reported.

Under the pc-prive system, employees could buy a computer with a loan from their employer for up to a tax-free amount of EUR 2,269. But since 1 January, a maximum of just EUR 1,415 is allowed.

The Dutch Parliament was concerned that workers would be confronted with an additional tax bill if they bought their computers in 2002 or 2003 and had spread out their repayments over several years. Liberal VVD MP Dezentje Hamming said the tax bill could amount to more than EUR 700.

Reducing the deductible amount of the pc-prive scheme was intended in part to compensate the Finance Ministry for allowing companies to purchase the traditional Christmas package, or kerst pakket, tax-free for their staff. It was also designed to offer better assistance to disabled youth.

But the change to the pc-prive system came under pressure at the end of last year after it was revealed that the Parliament had failed to consider the consequences for people who were already taking advantage of the pc-prive system.

State Secretary Wijn initially wanted employers and contracted workers to come up with a solution together. He also said on Wednesday that changes in fiscal policy often affect long-term agreements.

Despite this, both he and the Parliament found that the unforeseen effect was a "business accident" and needed to be rectified to save workers from an unexpected tax bill.

The latest amendments to the scheme will now be funded by the expected savings earned in reducing the deductible amount.

Employer association VNO-NCW said it was pleased with the changes.

Employees taking advantage of the pc-prive have to repay the financial assistance from the employer within three years. This can be done by forfeiting holidays or leave days. The computer, intended for the home, must be partly used in connection with the person's work.

[Copyright Expatica News 2004]

Subject: Dutch news

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