COVID-19

TOGS and TVL are tax-exempt
Entrepreneurs affected by the corona crisis were able to receive a compensation under government conditions according to the scheme Compensation for Entrepreneurs in Affected Sectors COVID-19 (TOGS). Some entrepreneurs also received a subsidy based on the Regulations governing Subsidy towards Fixed Costs incurred by SMEs due to COVID-19 (TVL). These compensations and subsidies will be exempt from income tax retroactively.

SVL subject to exemption
The Regulations governing Subsidy towards Fixed Costs incurred by SME Start-Ups due to COVID-19 has been succeeded by the Regulations governing Subsidy towards Fixed Costs due to COVID-19 (SVL). Under certain conditions, companies can receive a compensation towards their fixed costs as from the second quarter of 2021. The legislator also wants to exempt this subsidy from income tax, but expresses a reservation. The European Commission must approve the exemption. The conditionality of the exemption only concerns a possible extension of the SVL as from the fourth quarter of 2021.

Temporary easing of the work-related expenses scheme’s discretionary margin

It had previously been proposed to expand the discretionary margin of the work-related expenses scheme (WKR) for the year 2021. The discretionary margin was fixed at 3% of the taxable wage sum up to €400,000 plus 1.18% of amounts exceeding that. The earlier approval is now being laid down by law. Expansion of the discretionary margin offers employers opportunities to additionally compensate their employees in the difficult corona crisis period. For example, by providing a gift voucher or providing untaxed homeworking expenses allowances, in addition to the possibilities already available.

Take note! The proposal will enter into force with retroactive effect from 1 January 2021.

Tip! Due to the additional discretionary margin in 2021 on the wage sum up to €400,000, application of the group policy may have unfavourable ramifications. Check whether calculation of the discretionary margin per group member is more favourable.