Effective 1 January 2014, the current tax schemes for tax exempt allowances and benefits in kind will largely be abolished and the only scheme in force will be the Expense Allowance Scheme (Werkkostenregeling). For 2013, the distributable margin (vrije ruimte) under the Expense Allowance Scheme will be 1.5%.

In a recent evaluation of the Ministry of Finance with respect to the Expense Allowance Scheme, it was concluded that the system underlying the scheme is good, but that the scheme has been applied to a limited extent thus far (10% of employers in 2012).

Employers must therefore ensure that the new rules are put in writing this year and must seek the consent of the Works Council and employees if necessary.