More detailed regulation of the election of members of the Supervisory Board nominated by employees
Until recently, the law did not stipulate essentially any requirements on the election of Supervisory Board members nominated by employees. The only requirement was that in joint-stock companies with more than 500 employees one third of the Supervisory Board should be filled in this way.
Joint-stock companies thus had a free hand in how to facilitate the election of these Supervisory Board members. However, the absence of more detailed regulation was also problematic, as many entities did not know how to properly resolve some debatable issues. The amendment brought a significant clarification in this regard.
First of all, it is firmly established that only a current employee of the company can be a Supervisory Board member elected by the employees. Until now, electoral rules could also allow the election of other persons. However, now the Articles of Association can only provide an exception so that a Supervisory Board member can stay in the office if he retires during his term of office.
Furthermore, indirect elections are now explicitly allowed to take place, ie through voters elected by employees within designated constituencies. Again, only an employee of the company can be such an electorate. This method of choice is especially practical for companies with a large number of employees or companies with several plants.
The law also stipulates who is entitled to submit a proposal for the election of a Supervisory Board member. It is either the Board of Directors, a trade union, the employees' council, or together at least 10% of the total number of employees. The election itself must then be attended by at least one third of all employees.
In some respects, however, this new regulation raises more questions than answers. For example, similarly to election, at least one third of the employees must vote for the removal of a Supervisory Board member elected by the employees. A member of the Supervisory Board is then removed if at least half of the "eligible voters" voted for his removal. However, all employees of the company are eligible voters. This may appear to be an absurd situation where a vote is met that meets all formal requirements (i.e. in particular the participation of at least one third of the employees), but the member of Supervisory Board cannot be removed because the vote does not involve enough employees to decide on the removal (i.e. half of the "eligible voters").
According to the explanatory memorandum, the above-mentioned regulation of the election of Supervisory Board members nominated by employees does not, in most cases, allow the company to deviate from them. Therefore, we recommend that clients check whether their Articles of Association need to be amended.
Tax audit after the amendment of the Tax Code
With the amendment of the Tax Code from 2021, there were procedural changes in initiating tax audits. If in practice it was still possible to correct any accounting deficiencies, as there was enough time for this between the first contact with the tax administrator and the actual execution of the audit, this is no longer the case.
The tax administrator is only required to issue a notice of the commencement of a tax audit and deliver it to the audited entity. The notification will usually come to you either by mail or to the data box, if you have one. So don't expect any phone calls or emails from the tax administrator.
Likewise, the tax administrator will no longer ask you whether you agree with the conclusions of the inspection or have any reservations about them. The tax audit report also no longer requires your signature, nor does the tax administrator have to discuss it with you in person. Again, by post or via the data box, the message will be sent to you together with the notification that the tax audit has ended.
This "simplified" process benefits tax administrators in the fact that they can really surprise the audited entity. Therefore, entities do not have the opportunity to obtain documents proving the amount of tax paid or to put any unresolved issues in order. Therefore, we recommend that clients pay increased attention to the administration of their tax matters.
Reimbursement of costs associated with employees’ home office
In the December issue of our newsletter, we marginally mentioned the issue of reimbursement of employees' costs associated with their home office. In this article, we will take a closer look at this issue. The issue of reimbursement of these costs can have interesting tax implications.
First of all, it should be noted that reimbursement of costs incurred by employees in connection with the performance of work at the home office is not an employee benefit, although it is perceived as such by some employers. In fact, it is employers’ legal obligation. Costs incurred as a result of working from home associated with, for example, heating, higher electricity consumption, use of a personal telephone, etc., have to be reimbursed to employees by their employer.
Therefore, employers often consider how to reimburse these costs to employees. It is not exactly practical to ask every employee to prove each month what costs they have incurred in connection with the home office. This administratively burdens both the employer and the employees themselves. Employers therefore resort to reimbursing these costs in the form of a flat rate.
Unfortunately, the opinion of the Directorate-General for Finance in this matter makes the simple solution with a flat-rate cost very difficult. Employees are only to be reimbursed for proven costs. Any other performance by the employee is considered by the tax regulations as the employee's income, with all the resulting consequences. This may create an obligation to pay income tax and other levies on the employer's performance, which the employer and the employee consider to be reimbursement of costs.
Thus, it may be more appropriate to reimburse employees on the basis of invoices from the employee's suppliers, which the employee submits to the employer. However, even these invoices must be supported, for example, by energy bills or statements proving the use of a personal phone for business calls.
Unfortunately, there is currently no elegant solution to this problem. Given that all efforts to regulate the home office in more detail have so far been swept off the table, no improvement in the situation and an increase in employers' security can be expected in the near future.