Altered tax treatment staff outings and parties

On August 5, 2015 by Dutch Umbrella Company

With the implementation of the work-related expenses scheme the tax treatment of staff outings has changed. There are special rules for the location and to what degree the outing is related to the business. With regard to the location refreshments will continue to be tax-free if they are served out on the workplace during a staff party. Should the staff party take place at a different location the tax-free margin will apply.

Besides the location, the degree the party is business-related is another determining factor for the tax treatment. If it is a staff event with business-related purposes a specific exemption for temporary stay will apply. The event must be consistent with the purposes of your business. You could consider for example to link a seminar or a congress to an outing. You will then be liable for specific exemption for the aggregate expenses of the event, i.e. besides the refreshments also the overnight stays.

If the business-related event is continued elsewhere at the end of the day and the purpose of its continuation is not business-related, you will have to break down the aggregate bill of your event into a business-related tax-exempt part on the one hand and a non-business-related taxable part. In case of tax inspection you must be able to demonstrate what type of outing it was. Therefore you are well advised to keep a good record of everything.