Changed reporting requirement for costs proper to the employer on annual tax forms
The Belgian tax authorities have published a circular letter on February 26, 2021 to create a clear framework regarding the reporting of the expenses and lump sum cost reimbursements on the annual tax forms (fiche 281.10/20) . These new rules will enter into force as of 1 January 2022.
What are costs proper to the employer?
Costs proper to the employer can be defined as costs, incurred by an employee during the framework of their employment, on behalf of the employer. For example: internet allowance, home office allowance, business travel expenses, representation allowance, etc.
In order to justify the reimbursements of the incurred professional costs, these costs need to be reported on the annual tax form (fiche 281.10/20). Hereby, it is crucial that employers report the method of reimbursements of these professional cost and the respective amounts.
Currently, reimbursements of costs proper to the employer can be processed in 3 different ways:
- Based on actual expenses – by means of actual justifying documents such as restaurant tickets, invoices, parking tickets, etc.;
- Lump sum amounts based on ‘serious criteria’ – outlined by the Belgian (tax and social security) authorities;
- Lump sum amount not based on ‘serious criteria’ and not outlined by the Belgian (tax and social security) authorities.
What will change?
Today, it is only required to report the method of reimbursement of the professional costs whereby the exact amount only needs to be indicated in case the costs are reimbursed based method 3, i.e. in case the reimbursement is being made based on an agreement between the employer and employee.
As of 1 January 2022 the exact amount of the professional cost reimbursement paid during the income year needs to be reported on the annual tax form, regardless of the method of reimbursement applied. This should allow the Belgian tax authorities to perform their tax audits on a more detailed level.
An employee receives the following expense reimbursements:
- 50 EUR client lunch – based on actual expenses
- 15 EUR parking costs – based on ‘serious criteria’
- 200 EUR representation cost – not based on ‘serious criteria’
Current reporting on tax form 281.10/20 (tax forms filed until 31 December 2021):
As of 1 January 2022 reporting on tax form 281.10/20 (tax forms filed from 1 January 2022):
Fines in case of incorrect reporting on the annual tax forms
It is obligatory that all income items are declared correctly and in line with the Belgian tax law.
An incorrect filing of an annual tax form can result in a fine of 50 EUR for the first infringement, to a maximum of 1.250 EUR and/or a tax increase of 10% to a maximum of 200%.
Development of the wage standard for 2021-2022 officially set at 0.4%
Established in the Royal Decree of 9 August 2021, the wage standard for the period starting on 1 January 2021 until 31 December 2022 has been fixed at 0.4%.
This wage standard shows the absolute maximum of wage cost development occurring in the respective period.
Please note that this new wage standard does not include the sectoral indexations nor the wage scales, since these wage increases are always guaranteed.
Other components not to be included in the determination of the wage cost development are stock options, profit shares, pension contributions and temporary wage increases in the context of the COVID-19 crisis.
The wage standard should be respected and cannot be exceeded on an intersectoral, sectoral, corporate or individual level.
Not adhering to the wage standard can result in fines amounting between 250 EUR and 5.000 EUR, for every employee involved.
Conversion of eco vouchers of 2022 before October 31, 2021
The collective labour agreement concerning eco vouchers for employees falling under Joint Labour Committee 200, has been concluded for an indefinite period. Consequently, as an employer, in principle you will have to grant eco vouchers to your employees again in (June) 2022!
However, it is also possible to reward your employees by granting another equivalent benefit instead of eco vouchers. Another equivalent benefit can be e.g. the implementation of meal vouchers or increasing the nominal value of the current meal vouchers, implementation of a collective medical expense / hospitalization insurance, …
The implementation process depends on the presence or absence of a trade union delegation within your company. Employers who want to convert their eco vouchers of 2022 into another equivalent have time until October 31, 2021!
Please contact us, in case you would like our advice or assistance relating to this conversion.
Transfer of vacation days
The Belgian labour legislation stipulates that all (legal) vacation days of 2021 must be taken before the end of 2021.
Hereafter, we summarize the rules regarding the mandatory taking of the vacation days:
- Employees are in principle not allowed to transfer vacation days that have not been taken in the present calendar year, to the next calendar year. In principle, all legal vacation days have to be taken in the present calendar year (i.e. prior to December 31, 2021).
- In case the employees were unable to take their vacation days in the calendar year (for instance because of sickness), the employees lose definitely the right to take these vacation days, but they do not lose the right to the payment of their holiday pay.
- Employees are obligated to take the vacation days they are entitled to. The fact that employees do not ask for their vacation days does not affect the obligation for the employer to grant these days.
We would like to inform you that the above rules also apply to the taking of overtime days (if applicable), as well as the taking of the recuperation days of legal holidays.
We recommend you to inform your employees in time!
Replacement days for public holidays
As 2021 is gradually coming to an end, we remind you of the rules applicable to replacement days for public holidays.
As a general rule, private sector workers cannot be required to work on statutory public holidays, but they nevertheless remain entitled to receive their normal pay for those days. There are ten public holidays, and their dates plus the dates of the replacement days awarded for them must be set out in the employment regulation.
If a public holiday coincides with an official non-working day (e.g. a Saturday or a Sunday), employees are entitled to a replacement day off. Therefore, in 2022, employees will be entitled to take a replacement day for the following public holidays:
- New Year’s Day (Saturday, January 1st);
- Labour Day (Sunday, May 1st );
- Christmas (Sunday, December 25th).
If there is no agreement on company level about the replacement date, this public holiday will automatically be replaced by the first normal working day worked by the business after the public holiday.
If the company wants to set another replacement date, the decision must be taken on company level and needs to be displayed on the company premises, before December 15, 2021. A copy of the notice must be annexed to the employment regulations and must be send to the Social Legislation Inspectorate.
Thanks for informing your payroll consultant on the replacement dates for 2022.
13th month salary or year-end premium
Depending on the applicable joint labour committee, employees could be entitled to a 13th month payment (e.g. for JLC 200 payable in December). The conditions for this payment have been stipulated in the collective labour agreement.
The 13th month payment is subject to Belgian social security contributions and Belgian wage withholding taxes. The wage withholding taxes are calculated based on brackets applicable to exceptional remuneration.
Depending on the applicable joint labour committee, specific conditions could be foreseen. For e.g. JLC 200 the payment of the 13th month depends on the seniority within the company.
Your payroll consultant at Mazars is aware of these rules and will apply this – for our existing payroll clients - in your December payroll. If you require further information, please contact us.
Affiliation with a Belgian social insurance fund
In Belgium, it is mandatory for all companies subject to Belgian corporate tax or Belgian corporate tax for non-residents to affiliate with a social insurance fund and pay an annual contribution of 347,50 EUR up to 868,00 EUR (for 2021 and depending on the company's balance total of 2019).
Based on our practical experience with previous files, a company must affiliate with a Belgian social insurance fund, unless it can be justified that the company is not subject to the Belgian corporate income tax for non-residents. This can be justified by means of a certificate from the Belgian tax authorities stating that the company is not subject to the Belgian corporate tax for non-residents. Please note that, based on our experience, the affiliation is sometimes still mandatory by the Belgian authorities, despite the fact that a certificate from the Belgian tax authorities can be provided.
Please inform us if you would like that we verify if your company should affiliate towards a Belgian social insurance fund or if you would like to receive more information in this respect.
Belgian non-resident corporate income tax return
In general, foreign entities have the yearly obligation to file a Belgian non-resident corporate income tax return (hereafter “CITR”) by the statutory deadline.
Foreign entities having a Belgian establishment with a financial year that ended between 31 December 2020 and 28 February 2021 should file their Belgian non-resident corporate tax return by 28 October 2021.
Your company might already have reviewed the presence of a taxable permanent establishment or Belgian establishment for Belgian corporate income tax purposes or corresponded with the Belgian tax administration in this respect. Nevertheless, we find it useful to remind you of this possible Belgian tax return obligation, as the filing due date is fast approaching and in any case, the situation with the MLI and recent case law shows that cross-border and international taxation is constantly changing.
An administrative penalty (up to € 1.250,00) could be imposed or your company could be assessed on a lump sum tax base in case of non- or late filing of the Belgian tax return (to be increased with a tax surcharge).
Please contact us in case you require our assistance with the review or filing reporting requirements of this Belgian non-resident tax filing formality.
Did the company achieve good results during the corona crisis and would you like to grant your employees something extra?
If so, the corona premium may offer a solution: for the year 2021, between August 1 and December 31, you can grant each employee a maximum of EUR 500 in the form of consumption vouchers.
If these consumption vouchers are awarded correctly, they are not subject to employee social security contributions (13,07%) nor to personal income tax. Only a special employer contribution of 16,5% is due. The consumption vouchers are 100% tax deductible for the employer.
If you would like to receive more information regarding the consumption vouchers, please do not hesitate to contact us.
Covid-19: teleworking no longer recommended as from September 2021
For several months, teleworking was no longer compulsory, but strongly recommended for all employees whose jobs lend themselves to it.
This measure was lifted on 1 September 2021 by Ministerial Decree of 25 August 2021. It is effective from 1 September 2021 until 31 October 2021.
It was announced that this measure would not yet apply to the Brussels Region. There seems to be no decree from the Minister-President of the Brussels Region at the moment that the strong recommendation to telework would still apply in Brussels.
However, if employees return to the office, the employer is still obliged to take adequate preventive measures to ensure social distancing.
Covid-19: Tracing foreign workers
In the context of pre-tracing the labour force, the employer was obliged to collect and keep certain data of these foreign workers or self-employed persons.
This measure was lifted on 30 July 2021 by the Ministerial Decree of 27 July 2021.
According to the cooperation agreement of 14 July 2021, the following rule remains applicable when using foreign workers: the employer shall, for a period of 14 days from the start of the work, keep a register containing certain data relating to the foreign worker/self-employed persons.
In case you would like to receive more information about this formality, please contact us.
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