Leo Oudshoorn participates in the IR Global Employment Working Virtual Series Home Work: The challenges of cross border remote working

The past year has witnessed a huge remote working experiment for many of the world’s businesses and their employees as a result of Covid-19. And, for many, these new working practices have become hugely complex depending on where in the world business owners and employees have suddenly found themselves. Almost overnight, people are in uncertain territory regarding issues involving employment law, tax, social security
and pensions, to name just a few.

FOREWORD BY EDITOR, ANDREW CHILVERS

What are the consequences for a business when an employee works from home on a semi-permanent basis, transferring their residence to another country?

It is important to monitor an employee’s actual work place during 2021 for tax- and social security purposes. The Netherlands – Belgium/Germany. If an employee works in another country, it can have an impact on the country where this employee is taxable and in which country social security contributions are liable. For Belgium and Germany the Dutch government approved that the factual situation can be overruled and that taxation and social security liability will remain the same as if the employee would have continued to work in the Netherlands; likewise, the situation before 13-3-2020 (start date Dutch measures as a consequence of Covid19 crisis). The approval was valid until 1-1-2021 but has been extended to 1-7-2021. The Netherlands – other countries / tax. For other countries the regular rules apply. The Netherlands has an extensive international tax treaty network based on OECD guidelines. Employees who used to reside in the Netherlands in 2020 and who are carrying out activities in another country in 2021 can become taxable in that other country if they physically stay there for more than 183 days, or if their salary is eventually borne by an employer in that country. If an employee is changing his/her residency to another country than the Netherlands because (s) he switches to permanent accommodation in that other country where (s)he will be partly working, (s)he will be taxable in that country. The salary over the days that (s)he will be working in the Netherlands will only be taxable in the Netherlands if the employee physically stays in the Netherlands for more than 183 days or if his/her salary in borne by a company that has its residency in the Netherlands.

Are there specific rules applicable to remote working in your country? How do they apply to domestic and foreign companies?

Onboarding employee remotely. The first days of the new employee are crucial for alignment. This is the opportunity to take him or her along in the organsation: who are we, what do we stand for, what do we aim for and how can the new employee contribute to this? Organisations with an effective onboarding programme provide new employees with the right information and tools throughout the onboarding phase. In this way they ensure that employees become involved and can contribute to the objectives and ambitions of the organisation. If the new employee is deemed to start up employment from home, serious measures must be taken in order to efficiently get the employee onboard. Home- work distances are not that far in the Netherlands, but the Dutch government has introduced the standard to work from home as much as possible and employers must guarantee the 1.5 metre distance between work spaces in the office. Anticipating frequent web, zoom and teams meetings with the responsible manager and with other team members should be timely and organised. Most organisations appoint a buddy colleague to familiarise the new employee as quickly as possible. Right to change work place. In the Netherlands employees have the right to apply for a change in work hours and in work place. Employers have a duty to consider this. Generally spoken employers can only refuse these applications in cases of compelling business interests. Changing the work place to remote working from home must meet some conditions such as the guarantee that the work can be done safely and certain minimum standards are complied with in terms of good lighting and heating. If the employee is not functioning well, the employer can decide to urge the employee to work a certain number of days per week from the office.

Will companies have to provide new policies for remote working? Will this include providing employees with the necessary equipment and reimbursing costs related to remote work?

Reimbursement of commuting costs. Employers usually reimburse the costs of commuting to employees in the Netherlands. No matter the type of transportation from home to work and back, it is allowed to pay up to € 0,19 cent per kilometre tax free. Pursuant to a formula based on the average factual commuting days in a month, employees can get paid a fixed monthy allowance for commuting. Reimbursement for remote working. Costs incurred during working from home are often reimbursed by employers. The regular reimbursement is about € 2 per work day. This is a taxable benefit for the employee. It can be either taxed in the monthly payslip or it can be added to the so-called free space in the Labour Costs Scheme. The free space provides in a tax free amount of 3% over the annual accumulated taxable salaries of all employees up to € 400.000 and of 1,18% over the excess. If the free space is eaten up, the employer is taxed at a flat rate of 80%. Office equipment like a chair and a desk can be made available to the home working employee, but this is taxable unless there is still sufficient free space left in the Labour Costs Scheme or if the employer’s sickness prevention plan provides in the payment of office equipment. Laptops and other computer equipment can be made available or paid tax free to the employee if the employer considers this as a necessary condition to fulfill the employment tasks of the employee. Long term. The Covid19 crisis has encouraged employers and employees to continue to work far more remotely in the future. Organisations have to pro-actively monitor and develop new ideas and business strategies to cope with the new world order.

Future remuneration packages will differ from today: making a company car available to an employee will be discouraged, commuting allowances should be re-considered on actual commuting days, office equipment should be made available, compensation for home work costs should be considered.