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11 July 2019

Life-long Development – Explanation of learning budgets and tax-free reimbursement of study costs

On 3 June this year, Minister Koolmees of Social Affairs and Employment reported to the Lower House in a Letter to Parliament on the progress being made with the plans to promote Life-long Development for employees and employers.

Letter to Parliament

Part of this report is a clarification of the tax treatment of individual learning and development budgets allocated by employers. Under what conditions may the allocation of the budget and its use for study and courses for employees be made tax-free?

An explanation has meanwhile been published by the Tax Authorities regarding the tax-free reimbursement of study costs, setting out the tax preconditions for the tax-free allocation of a budget. The explanation also contains a questionnaire to assess whether the exemption can apply for study costs. The explanation can be found on the website of the Tax Authorities (in Dutch): 'Scholingskosten in de loonheffingen'.

The explanation deals in particular with situations where a collective agreement (CAO) applies. Since the statutory system is assumed, the methodology outlined should also apply, we believe, to employers for whom no CAO applies.

The intention is for the Tax Authorities to monitor the practical experience with the explanation and questionnaire, so that further clarification can be given where necessary. A coordinating inspector has also been appointed at the Tax Authorities, whose job is to promote consistency of implementation and enforcement. Looking forward, work will be done on clarifying further the tax treatment of budgets in the form of learning accounts. Further announcements are expected during the summer.

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