Reporting fringe benefits(Taxwatch (Tax news in english))
02-06-2010 07:20
Af
Anders Kiærskou
Benefits in the form of gifts are common in many workplaces. Gifts are commonly used in three contexts: As prizes in competitions between sellers, as a reward for exceptional performance or as a present at private anniversaries.
Until 2010, employers where not obligated to report such gifts to SKAT. However, the obligation to report fringe benefits has been intensified from 1st January 2010.
Companies are now obliged to report virtually all fringe benefits. Only benefits covered by the de minimise rule and gifts for certain special occasions are exempt from the employer's obligation to report the benefits to SKAT.
Gifts are usually not covered by the de minimise rule. Gifts for special occasions are only exempt if they are within the ordinary limit for such gifts.
Many companies have sales contests with varying prizes to encourage employees to compete to sell the most. These kinds of prizes must now be reported to SKAT. The same goes for rewards to employees having made a particular effort.
There is no lower threshold. Even the value of six bottles of red wine will have to be reported.
The intensified obligation for employers to report fringe benefits do not change the fact that employees themselves must ensure that the value of prizes or rewards are included on the tax return.
SKAT is automatically notified if the employer meets his duty and reports the benefits. This can easily lead to employees preferring cash to benefits in kind.
The obligation to report these fringe benefits hardly arouse enthusiasm in any company. It is difficult to establish standard routines for gathering information on such matters and it is hardly easy to convince sales managers and heads of departments etc. to give notice of such benefits to the payroll office that typically is responsible for reporting fringe benefits to SKAT.
Questions regarding the above can be addressed to Anders Kiærskou at aek@bdo.dk
Til nyhedslisten