Beskatning af udvalgte personalegoder

Pernille Doktor

Student thesis: Master thesis

Abstract

This thesis aims to identify and analyze various alternatives to wage income, also called benefits. The tax in Denmark makes it interesting to see which employee benefits that could result in a partial or full tax exemption. Fringe benefits are always a hot topic. The individual company and its employees naturally try to get as much out of the wages that are available. Therefore, many companies use the so-called flexible salary packages, where employees, to some extent, can choose one or more perks rather than cash salary. The main rule is that all benefits are taxable and the taxable value represents the employer’s expense. There is however a number of exceptions, which means that it for tax purposes can be an advantage to get, perk rather than cash salary. The basis of the taxation in Denmark is State Taxation Law § 4. This law states that the taxable income is the taxpayer’s total annual income, consisting of both money and property with monetary value, whether the income originates from Denmark or not. Which means that all economic benefits unless special laws expressly exempt them, shall be counted as taxable income. The Assessment Act § 16 provides details concerning the taxation and valuation of taxable benefits. It specifies, among other things, that the valuation of benefits shall be at market value, i.e. an amount equal to the cost the employee would have had on the purchase of goods in free trade. If the benefits is covered by the minimum amount of DKK 5.500 (2011) or are otherwise exempt from taxation, the employee is not taxed on the value of the benefit. From an employer’s point of view, it must also be a demand that employee benefits, other than staff care, is financially attractive to offer its employees. State tax law § 6 says that the employer can deduct the costs of goods, if it is an operating cost, just as with the cash wage. To get deductibility of an operating cost, as described in the state tax law § 6, it requires, that the goods are purchased with the purpose of acquiring, securing and maintaining income. Viewed from the employee's eyes, it is interesting to see how the benefits will be taxed and whether this constitutes a tax savings for the employee. An employee and an employer may enter into an agreement where the employee accepts a reduction in gross salary, in return for one or more fringe benefits. Such an arrangement is also called a gross reduction or a gross tensile scheme. One of the advantages of this scheme is that the employer will not have additional costs of providing the goods, as this is financed by the decline in wages. Likewise, this agreement will be a benefit for the employee, as a portion of the costs will be funded by saved taxes. To use this scheme there are six criteria’s and two support criteria’s, which must be followed, before the scheme can be accepted by TAX. The introduction of tax reform spring package 2.0, led to some changes in the taxation of fringe benefits applicable from 1 January 2010. The purpose of this thesis is to identify and analyze various types of fringe benefits, and the topics multimedia and company car are selected. These are selected because they are among the most widespread. In addition company car is the benefit, which represents the highest value, while the multimedia taxation is a newer set of rules, and therefore is a much discussed topic. The tax value of company car is calculated at the basis of a fixed schematic value. This value is calculated from a percentage of the price of the car, meaning the car's value at purchase plus usual equipment. When calculating the tax value of a company car, you have to look at, when the car was registered for the first time and if it is more or less then three years ago. In order to fully or partially avoid this tax, the employee shall prove, that the car is not being used for private purposes. With the introduction of multimedia tax, this is a significant tightening of the rules, which applied until 31 December 2009. The significant tightening is seen by the fact that it is not only private use, as before, but now alone the fact that it is available for private use which will result in tax. No distinction is made anymore between a work-tool and a fringe benefit and this leads to that the new multimedia tax, affects a part of the situations where it previously would not have caused tax. It is interesting to look at how this newer law is being interpreted and used. There are still some uncertainties on the subject.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages87