Netherlands Terminology

The following table defines the terms used in NetSuite to support businesses in the Netherlands.

Term	Definition
Tax-Related Terms	These terms are related to VAT and XAF reporting in the Netherlands.
ESSP tax code	This tax code is used for purchases of services from other European Union (EU) member states.
Supplier	In the Netherlands tax audit file, XAF, the supplier refers to the vendor. Supplier data in the XAF file is sourced from vendor records in NetSuite.
XAF	XAF stands for XML Auditfile Financieel, the tax audit file required in the Netherlands.
WKR-Related Terms	The following terms are related to the werkkostenregeling (WKR) reporting feature in the Netherlands Localization SuiteApp.
Baseline for WKR budget	The taxable wage threshold that determines what percentage to use to calculate the WKR budget that can be spent for nontaxable employee benefits and allowances. The baseline is not arbitrary and must be based on the Netherlands legislation on WKR. The legislation usually gives two percentage rates to calculate the WKR budget: one percentage rate for the amount of taxable wage below the baseline, and the other percentage for the amount that exceeds the baseline. For example, in 2021, the WKR budget is 3.0% of the fiscal salary up to 400,000 euros (baseline), and 1.18% of the amount over the baseline. For more information, see WKR budget on this terminology table.
Final levy	Also called the final tax levy, this term refers to the tax you are going to pay if the amount spent on employee benefits and allowances exceeded the WKR budget. For more information, see Final Levy Calculation in WKR.
Fiscal salary	Fiscal salary in WKR reporting refers to the total taxable wage. The Netherlands Localization SuiteApp uses the taxable wage to compute the WKR budget. For more information, see Fiscal Salary Computation in WKR.
Tax rate above WKR budget	This is the tax rate that is used to compute the final levy if the amount spent on employee benefits and allowances exceeded the WKR budget. The tax rate, which is based on the Netherlands legislation, is applied on the excess amount of the WKR budget.
Work-related costs	In NetSuite, the work-related cost refers to the allowances, benefits, and in-kind provisions for your employees, which, up to a certain value, can be tax-free. The Netherlands Localization SuiteApp enables you to report your work-related costs according to the werkkostenregeling requirements.
WKR categories	This term refers to categories of employee benefits and other work-related costs. The categories, which you assign to an expense, item, or account, determine whether a certain work-related cost can be charged to your WKR budget. For more information, see WKR Categories and Assigning Accounts, Items, and Expense Categories to WKR.
WKR budget	Also called legally as the discretionary scope or free space, the WKR budget is the amount you can spend on employee benefits and allowances tax-free. The WKR budget is derived from a certain percentage of the fiscal salary if it equals to or exceeds the baseline. For more information, see WKR budget above baseline, and WKR budget below baseline on this terminology table.
WKR budget above baseline	The WKR budget above baseline indicates the percentage that will be used to compute a part of the WKR budget from the amount in the fiscal salary that exceeds the baseline. This percentage is not arbitrary and must be based on the Netherlands legislation. For example, the fiscal salary in your company amounts to 500,000 euros and the Baseline for WKR budget is 400,000 euros. The percentage indicated in the WKR budget above baseline will be applied to the difference of the fiscal salary from the baseline (100,000 euros). For more information, see WKR Budget Calculation.
WKR budget below baseline	The WKR budget below baseline indicates the percentage that will be used to compute the WKR budget from the fiscal salary that is equal to or less than the baseline. This percentage is not arbitrary and must be based on the Netherlands legislation. For example, the fiscal salary in your company amounts to 500,000 euros and the Baseline for WKR budget is 400,000 euros. To compute the WKR budget, the percentage indicated in the WKR budget below baseline is first applied to 400,000 euros (baseline). Then, the percentage indicated in the WKR budget above baseline is applied to the difference (100,000 euros). For more information, see WKR Budget Calculation.

Term

Definition

Tax-Related Terms

These terms are related to VAT and XAF reporting in the Netherlands.

ESSP tax code

This tax code is used for purchases of services from other European Union (EU) member states.

Supplier

In the Netherlands tax audit file, XAF, the supplier refers to the vendor. Supplier data in the XAF file is sourced from vendor records in NetSuite.

XAF

XAF stands for XML Auditfile Financieel, the tax audit file required in the Netherlands.

WKR-Related Terms

The following terms are related to the werkkostenregeling (WKR) reporting feature in the Netherlands Localization SuiteApp.

Baseline for WKR budget

The taxable wage threshold that determines what percentage to use to calculate the WKR budget that can be spent for nontaxable employee benefits and allowances.

The baseline is not arbitrary and must be based on the Netherlands legislation on WKR. The legislation usually gives two percentage rates to calculate the WKR budget: one percentage rate for the amount of taxable wage below the baseline, and the other percentage for the amount that exceeds the baseline.

For example, in 2021, the WKR budget is 3.0% of the fiscal salary up to 400,000 euros (baseline), and 1.18% of the amount over the baseline. For more information, see WKR budget on this terminology table.

Final levy

Also called the final tax levy, this term refers to the tax you are going to pay if the amount spent on employee benefits and allowances exceeded the WKR budget. For more information, see Final Levy Calculation in WKR.

Fiscal salary

Fiscal salary in WKR reporting refers to the total taxable wage. The Netherlands Localization SuiteApp uses the taxable wage to compute the WKR budget. For more information, see Fiscal Salary Computation in WKR.

Tax rate above WKR budget

This is the tax rate that is used to compute the final levy if the amount spent on employee benefits and allowances exceeded the WKR budget. The tax rate, which is based on the Netherlands legislation, is applied on the excess amount of the WKR budget.

Work-related costs

In NetSuite, the work-related cost refers to the allowances, benefits, and in-kind provisions for your employees, which, up to a certain value, can be tax-free. The Netherlands Localization SuiteApp enables you to report your work-related costs according to the werkkostenregeling requirements.

WKR categories

This term refers to categories of employee benefits and other work-related costs. The categories, which you assign to an expense, item, or account, determine whether a certain work-related cost can be charged to your WKR budget. For more information, see WKR Categories and Assigning Accounts, Items, and Expense Categories to WKR.

WKR budget

Also called legally as the discretionary scope or free space, the WKR budget is the amount you can spend on employee benefits and allowances tax-free. The WKR budget is derived from a certain percentage of the fiscal salary if it equals to or exceeds the baseline. For more information, see WKR budget above baseline, and WKR budget below baseline on this terminology table.

WKR budget above baseline

The WKR budget above baseline indicates the percentage that will be used to compute a part of the WKR budget from the amount in the fiscal salary that exceeds the baseline. This percentage is not arbitrary and must be based on the Netherlands legislation.

For example, the fiscal salary in your company amounts to 500,000 euros and the Baseline for WKR budget is 400,000 euros. The percentage indicated in the WKR budget above baseline will be applied to the difference of the fiscal salary from the baseline (100,000 euros). For more information, see WKR Budget Calculation.

WKR budget below baseline

The WKR budget below baseline indicates the percentage that will be used to compute the WKR budget from the fiscal salary that is equal to or less than the baseline. This percentage is not arbitrary and must be based on the Netherlands legislation.

For example, the fiscal salary in your company amounts to 500,000 euros and the Baseline for WKR budget is 400,000 euros. To compute the WKR budget, the percentage indicated in the WKR budget below baseline is first applied to 400,000 euros (baseline). Then, the percentage indicated in the WKR budget above baseline is applied to the difference (100,000 euros). For more information, see WKR Budget Calculation.

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