A new Circular letter with regard to the exemptions from payment of the withholding tax

The tax legislation provides an exemption from payment of the withholding tax in well-defined circumstances and under certain conditions.

This exemption in particular applies to companies which work in shifts and/or at night or which employ researchers. In the latter case for example, the rate of the exemption is 75% since 1 January 2009.

It is the employer who benefits from the withholding tax exemption. The withholding tax continues to be withheld from the salary of the employee, but it does not all have to be paid to the Treasury.

The tax administration has now issued a Circular letter on the subject. This Circular letter, which incorporates the recently introduced changes, is a good summary of the possibilities for exemptions in favour of the employers.