Expat ruling

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Expat ruling
« on: July 17, 2018, 04:49:09 AM »
Problem

The expat ruling must be applied to an employee.

Cause

The employer has received permission from the inspectorate to apply the Expat scheme to the employee.

The expat scheme requires NO special calculation for the wage tax and premiums. The employee has to pay wage tax and premiums just like any other employee.

But there are a number of advantages:

a) Elements such as travel, hotel, and refurbishment costs in case of a posting abroad and repatriation, compensation for
school of children and wages in kind (fringe benefits) are exempt from tax to a certain level.

b) In case of a nett wage contract the compensation for the wage tax by the employer in is exempt from wage tax.

Solution

a) Create a new untaxed wage code for each of the exempted remuneration elements to be awarded:

1) Click on "Company data & Options"
2) Click on the menu bar in the "Add" group on "Wage code".
3) Click on "Next".
4) Enter a name and a description for the new pay code and click on "Next".
5) Select type of wage code "Untaxed wage component"
6) Click on "Next" and on "Finish"

If the exempted elements return monthly, you can book them on the "Wage" tab under the "Fixed salary components", otherwise you book the at "Mutations"

b) Create a new wage code for the wage tax exempted wage tax allowance:

1) Click on "Company data & Options"
2) Click on "Wage code" on the menu bar in the "Add" group.
3) Click on "Next".
4) Enter a name and a description for the new wage code, for example "TLB - Addition wage tax" and click on "Next".
5) Select type of wage code "Untaxed wage component"
6) Click on "Next" and on "Finish"

AFTER you have processed the employee you will see how much wage tax the employee must pay. Book the wage tax allowance at "Mutations" or on the "Wage" tab under the "Fixed pay components" and re-process the period.
« Last Edit: July 17, 2018, 05:00:39 PM by Support »

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Re: Expat ruling
« Reply #1 on: July 17, 2018, 05:00:28 AM »
Problem

The expat ruling must be applied to an employee.

Cause

The employer has received permission from the inspectorate to apply the Expat scheme to the employee.

The expat scheme requires NO special calculation for the wage tax and premiums. The employee has to pay wage tax and premiums, just like any employee.

There are a number of advantages:

a) Elements such as travel, hotel, and refurbishment costs in case of posting abroad and repatriation, compensation for
school of children and wages in kind (fringe benifits) are exempt from tax to a certain level.

b) In case of a nett wage contract the compensation for the wage tax is exempt from tax.

Solution

a) Create a new wage code for each of the exempted remuneration elements to be awarded:

1) Click on "Company data & Options"
2) Click on "Pay code" on the menu bar in the "Add" group.
3) Click on "Next".
4) Enter a name and a description for the new pay code and click on "Next".
5) Select type of wage code "Untaxed wage component"
6) Click on "Next" and on "Finish"

If the exempted remuneration elements return monthly, you can book them on the "Pay" tab under the "Fixed salary components".

b) Create a new wage code for the exempted wage tax allowance:

1) Click on "Company data & Options"
2) Click on "Pay code" on the menu bar in the "Add" group.
3) Click on "Next".
4) Enter a name and a description for the new wage code, for example "TLB - Addition wage tax" and click on "Next".
5) Select type of wage code "Untaxed wage component"
6) Click on "Next" and on "Finish"

AFTER you have processed the employee you will see how much wage tax the employee must pay. Book the wage tax allowance on the "Wage" tab under the "Fixed pay components" and re-process the period.