This is how it is
The multimedia tax means that an employee is taxed
- if the employee brings home the employer's PC;
- if the employer pays for the employee's home broadband or landline telephone connection, or
- if the employee brings home a mobile phone from work and the employer does not subsequently check whether the phone has been used for private calls. If a phone is made available to an employee for business use, but is also used for private calls, the taxation will be reduced by the employee's own expenses.
In all events, tax will levy at a fixed rate of DKK 250 per month equal to DKK 3,000 per year. The amount does not depend on how many benefits are paid for by the employer. When an employee pays multimedia tax, it is possible to finance e.g. computers and PCs by withholding salary before tax (gross pay scheme).
This is how it will be
PCs and broadband
According to the new bill, tax will not be payable if an employee brings home the employer's PC. An employer-paid broadband connection will not be taxed either if it is used to access the same functionalities and documents which are available at the workplace.
If the connection does not provide access to the same functionalities and documents that are available at the workplace, the employer-paid Internet access will give rise to tax of DKK 2,500 per year.
Mobile telephony
In future, an employee will not be taxed if his or her employer makes a telephone required for the performance of the employee's work duties available to the employee. If the employee brings home the mobile phone, the employee must, in order to avoid taxation, sign a declaration that the mobile phone is used for business purposes only and that the employer monitors the use of the phone.
If the employer makes a mobile phone available to the employee which may also be used for private purposes, the employee is liable to pay tax on the value of free telephone. This value is DKK 2,500 per year and includes the phone, subscription expenses, calls and other telephone services associated with the subscription. The employee may not as previously reduce his or her taxation by own expenses.
There is, however, a discount scheme available to spouses who both have free telephone, offering each spouse a tax discount of 25 per cent.
Compared to the former rules on the purchase of phones under a gross pay scheme, the employee must be aware that he or she will be taxed on the value of free phone as the presumption is then that the phone is used for private purposes.
If an employee has both a free telephone and an employer-paid Internet connection which does not provide access to the workplace network, the taxation of the free telephone and the Internet connection will not exceed DKK 2,500 as the taxation is considered to be an overall taxation.
Home workplace
An employee may have a computer made available for business use without it having any tax implications. If the computer is, however, used for private use only, the employee will be liable to pay tax on the full market value.
A computer acquired under a gross pay scheme is like mobile phones not presumed to be used only for business purposes. If the computer is made available for private use, then the employee is liable to pay tax on a value equal to 50 % of the replacement cost in the income year in which the computer was made available. This means that if the home workplace is made available for a period of three years or more, the employee will be liable to pay tax on a value that exceeds the actual market value of the equipment.
Therefore, it no longer makes any sense to apply the gross pay scheme to permit the employee to have a computer.