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The tax-free staff discount on products purchased at employees’ workplaces may end in 2027. The Dutch cabinet plans to abolish this benefit from 1 January 2027 as part of cost-saving measures, prompting opposition from retailers, hospitality firms, and unions.
What is changing
Currently, companies can offer employees a tax-free discount of up to 500 euros per year on their own products, provided the discount does not exceed 20 percent of the retail price. This benefit is widely used in retail, hospitality, culture, and travel sectors.
Under the proposed 2027 Tax Plan, this specific tax exemption would be eliminated, with expected annual savings of approximately 123 million euros. Employers could still offer staff discounts, but only by using the general “free space” (vrije ruimte) within the work-expenses scheme (WKR), which is the tax-free budget for staff benefits.
The government’s reasoning
The cabinet presents this change as a simplification rather than a cut. The WKR has become complex and administratively demanding. Research bureau SEO recommended removing the staff-discount exemption, stating it no longer serves a clear social purpose and does not align with the scheme’s objectives. The government argues that eliminating it will simplify administration for employers.
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Why the sector is unhappy
Critics argue that this simplification disadvantages employees. The “free space” also funds Christmas gifts, staff events, and bicycle schemes, and is already largely allocated at many companies. Exceeding this limit results in an 80 percent tax on the excess. Although the free space will increase slightly, it will not be sufficient to cover a 500-euro discount per employee.
Another complication is that in sectors such as retail, hospitality, culture, and travel, the staff discount is included in collective labour agreements (cao). Employers cannot simply remove it; they would need to renegotiate terms, offset the benefit against wages, or absorb the cost within existing budgets.
Unions and employers, typically on opposing sides, share concerns. Linda Vermeulen of union FNV described the staff discount as “one of the few perks that shop staff receive” in a low-wage sector, calling it both a welcome bonus and a sign of appreciation. Paul te Grotenhuis of INretail argued that funding the discount from existing budgets is “far too simplistic” and predicted the change would increase, rather than reduce, disputes with the tax office, undermining the government’s goal of reducing administrative burden.
What happens next
A coalition of 25 trade associations from retail, travel, culture, hospitality, and services has launched a petition urging parliament to abandon the plan. The petition quickly gathered several thousand signatures and will be presented to the House of Representatives in November during the Tax Plan debate. As with the rest of the budget, the measure is not final and still requires parliamentary approval, where the minority government does not hold a majority.