Individual Tax, Social Security and Immigration Alerts
News you can count on
Belgian Supreme Court confirms the broad definition of salary
21 June 2019
In its 7 March 2018 ruling, the Brussels Labour Court claimed social security contributions on benefits awarded directly to employees of a third party. As these benefits were to be considered as reward for work completed under an employment contract, social security contributions are due, even without any employer intervention, or any cost at charge of the employer.
In their ruling of 20 May 2019 (published very recently), the Belgian Supreme Court rejected the appeal and confirmed the Belgian social security authorities’ position (covered by the Social security alert of 11 September 2018).
Belgian income tax practices for football clubs and players clarified
7 June 2019
Several parliamentary questions were submitted to the Minister of Finance regarding several tax specific practices in football clubs. The responses to these questions were recently published, clarifying several points outlined in this update.
Updates on professional withholding tax developments for employers
6 June 2019
The new withholding obligation with respect to foreign benefits, introduced at the end of 2018, is one of the most recent and high profile measures regarding professional withholding tax. Coverage is provided by the previous Tax Alerts of 4 February 2019 and 22 March 2019.
What follows is a look at other recent measures and clarifications regarding professional withholding tax.
Employers to pay EU social security on non-EU activities of employees
6 June 2019
In principle, EU Regulation 883/2004 determines the applicable social security legislation for cross-border situations within the European Union.
However, the Court of Justice of the European Union (CJEU) recently rendered a noteworthy judgment, which may have consequences for certain cross-border employment situations where the employee is working outside of the EEA or Switzerland, while maintaining clear links within these territories.
Belgian taxpayers who are not compliant with the reporting of foreign bank accounts and life insurances likely to have received a notification letter from the Belgian tax authorities
29 May 2019
The Belgian tax authorities have issued earlier this month roughly 200.000 letters to Belgian taxpayers who would not have correctly reported the existence of foreign accounts and life insurances in their Belgian income tax return.
Mobility Budget Website – First update
23 May 2019
As previously communicated, the Federal Government launched a website providing further clarification regarding the mobility budget and its implementation. This website accompanies the law and royal decree on the mobility budget and aims to clarify key aspects of the legislation. On 17 May 2019, the website’s first update was published, introducing various new questions.
Online tax return filing deadline six weeks away
20 May 2019
On 3 April 2019, the new form for the 2018 resident income tax return (assessment year 2019) was published in the Official Belgian Journal (Dutch | French). The tax authorities recently communicated the filing deadlines:
- 28 June 2019 for paper filing
- 11 July 2019 for tax-on-web filing
- 24 October 2019 for proxy holders filing tax returns on someone’s behalf on tax-on-web
Following this publication, the most relevant changes since last year are highlighted. Similar to last year, three separate versions of the first part of the tax return are published for each region.
Cross-border loans of personnel: potential extension of NSSO social inspector competences
23 April 2019
On 27 March 2019, the Belgian National Labour Council approved the draft Royal Decree that aims to extend the competences of NSSO (RSZ/ONSS) social inspectors regarding illegal loans of personnel (Dutch | French).
Forbidden loans of personnel consist of employers placing employees at another entity’s disposal, with (part of) the employer’s authority delegated (usually in the framework of a secondment).
The draft Royal Decree aims to contribute to the fight against social fraud and unfair competition in international employment situations.
Parliament withdraws so-called ‘anti-incorporation tax’
5 April 2019
In the evening of 4 April 2019, the parliament voted to abolish the so-called ‘anti-incorporation tax’.
Within the corporate tax reform framework, two changes were made to the ‘minimum remuneration requirement’ for financial years starting on or after 1 January 2018 (tax year 2019).
Government launches dedicated Mobility Budget website
4 April 2019
After publishing the law and accompanying royal decree for the Mobility Budget on 29 March 2019, the government also launched a new dedicated website (Dutch | French), the content of which is managed by the combined ministries of Employment, Social Affairs, Income Tax and Social Security.
The website is set-up as a FAQ document, covering 64 questions across 9 Topics. It is not clear whether a more formal FAQ document will be published on the Ministry of Finance’s official website, as is the case with company cars’ benefit in kind for example.
Single Permit: first salary thresholds and new process features
2 April 2019
Since the introduction of the Single Permit on 1 January 2019, the first approvals through the new procedure were granted during the last weeks of March 2019. With the new system currently in place for three months, some of the most important features of the new process are outlined.
Law and Royal Decree for Mobility Budget published along with an update to Mobility Allowance
29 March 2019
With the publication of the Law, as well as a Royal Decree on how to manage the Mobility Budget (Dutch | French), employers can now begin making a more concrete and detailed assessment on whether this is a worthwhile new opportunity to offer their employees.
Parliament approves “Jobsdeal” tax measures
25 March 2019
This tax alert provides an overview of relevant measures from an HR and personal tax standpoint.
Belgian parliament finally approves Mobility Budget measure
1 March 2019
After a long legislative process, the Belgian federal parliament has finally approved the ‘Mobility Budget’, the long-awaited second alternative to company cars.
Although intentions behind the Mobility Budget’s implementation are positive, bringing alternatives that are constructive for next steps, it remains to be seen whether these will convince a large(r) group of employees to shift from company cars to alternative mobility behaviour.
Free housing BIK calculation adjusted as of 1 January 2019: No multiplier coefficient for IY 2018
27 February 2019
As covered in the tax alert of 17 May 2018, the Ghent court of appeal decided that the increased benefit-in-kind valuation for free housing provided by a legal person is discriminatory and cannot be applied. Following this judgment, the Circular Letter (2018/C/57) of 15 May 2018 (Dutch | French) was published, confirming case law alignment. The Royal Decree of 7 December 2018 (Dutch | French) provides a legal framework that settles the issue.
Parliament approves withholding and reporting obligations on remuneration paid outside of Belgium
4 February 2019
The tax alert of 28 January 2019 covered the amendment submitted to Parliament with regard to the draft law on the new tax reporting and withholding obligations. The revised draft law has since been approved by Parliament on 31 January 2019.
Tax on securities accounts: tax return form published
1 February 2019
Following the tax alert of 29 November 2018, the tax authorities have released the tax return form for the tax on securities accounts (Dutch | French). What follows is a guide through the practicalities of the tax return for individuals.
Withholding and reporting obligations on remuneration paid outside of Belgium: status update - amendment submitted to Parliament
28 January 2019
Following the tax alert of 12 December 2018, covering the foreseen new withholding and reporting obligations on remuneration paid outside of Belgium, we provide you with a brief update since the draft law is yet to be voted by Parliament. Notwithstanding the Belgian government being in so-called “current affairs” modus, an amendment to the draft law has been submitted to the Belgian parliament.
Update on the impact of WLTP: NEDC CO2 can be used
21 January 2019
The update confirms and formalises the use of the NEDC CO2 value to determine the income tax treatment of a company car. The FAQ stipulates that the NEDC value, rather than the (much) higher WLTP value, can be used until 31 December 2020. As from 1 January 2021, only the WLTP value will need to be taken into account.
Brexit Readiness Update: the latest developments and more
16 January 2019
Political developments - Impact for global trade - EU Commission preparing Brexit Contingency Plan - Belgium preparing a Brexit emergency law - Market/industry developments - Helping you prepare for a “no-deal” Brexit - Brexit webinars
Employer gifts: fringe benefits, cash equivalents or vouchers
21 December 2018
Following the 3 July 2018 Royal Decree (Dutch | French), which increased the gift amounts that can be given by employers to their employees for social security purposes (as covered in the 8 May 2018 tax alert), a Circular Letter (Dutch | French) has been issued on 5 December 2018, which updates similar amounts for tax purposes.
Employers should prepare for potential withholding and reporting obligations on remuneration paid outside of Belgium
12 December 2018
As covered in the tax alert of 12 October 2018, a pre-draft law may introduce a new tax reporting and withholding obligation which not only applies to foreign equity plans, but also to ‘all remuneration’ granted by a foreign related company to an individual working ‘for the benefit of’ the Belgian group entity.
This pre-draft law still needs to be accepted by the Belgian Government and Parliament, which is uncertain given the political climate at the time of writing.
The Mobility Budget: A second alternative for the company car
6 December 2018
On 3 December 2018, a draft law was introduced to implement the long awaited Mobility Budget (Dutch | French). In addition, a draft law to update the existing Mobility Allowance (or “Cash for Car”) regulation was introduced (Dutch | French), mainly to align the scope of both measures.
To reflect the measure’s scope and impact, Deloitte has published a report to examine whether this additional measure can convince employees to move towards multi-modal mobility.
Tax on securities accounts: reporting requirements
29 November 2018
With the approaching payment deadline for Belgian professional intermediaries concerning the first reference period, many Belgian banks are currently reaching out to their securities account holders to address the necessary formalities. A Royal Decree with practical information has been published on 9 November 2018 (Dutch | French).
Daily allowances for Belgian business trips updated
20 November 2018
The circular reconfirms that private sector employers may rely on these amounts.
A supplementary pension scheme for every employee?
09 November 2018
Following the recently published draft law introducing a new voluntary supplementary pension scheme (Dutch | French), employees who do not benefit from an occupational pension scheme, built up by 3% or more via their employer, will have the possibility to directly subscribe to a supplementary pension contract of their choosing. The aim of the new legislation is to improve the spread of supplementary pension coverage for all employees, taking into account the increased pressure on the sustainability of legal pensions.
The free supplementary pension scheme for employees (hereafter “FSPE”) is mainly based on (i) the well-known Supplementary Pensions Act and (ii) the recently introduced supplementary pension scheme for self-employed individuals. It does nevertheless have its own legal framework and specific characteristics.
Revised bilateral social security treaty between Belgium and Turkey
24 October 2018
After a lengthy ratification procedure, the revised bilateral social security treaty concluded between Belgium and Turkey on 11 April 2014 entered into force as of 1 September 2018. This revised treaty replaces the old treaty that dates back to 1966.
Updated daily lump sum allowances for business trips abroad
18 October 2018
In the Circular Letter of 12 September 2018 (2018/C/109 – Dutch | French), the tax authorities have confirmed that the private sector can rely on the daily allowances used in the public sector to reimburse the costs incurred by employees/directors during foreign business trips exceeding ten consecutive hours.
The lump sum allowances amount vary from country to country. An overview of the applicable lump sum allowances per country can be found on the annex to circular 2018/C/109 (Dutch | French). The updated amounts are applicable as from 6 July 2018.
Transitory measures after all for shortened 30% facility in the Netherlands
18 October 2018
On 15 October 2018, the Dutch Ministry of Finance announced transitory measures for existing 30% rulings that would end in 2019 and 2020.
Updates on Salary Indexation for Immigration purposes and Single Permit
17 October 2018
The Flemish, Brussels and Walloon immigration authorities recently communicated the new salary thresholds for foreign employees holding work permits.
According to the regional governments, the implementation of Belgium’s new immigration process (the so-called “Single Permit”) is still foreseen for January 2019.
Belgian employers obliged to report and withhold on foreign (equity) remuneration
12 October 2018
The pre-draft law for a new tax reporting and withholding obligation regarding foreign equity plans (previously covered by the 31 July 2018 tax alert) has been approved by the Council of Ministers.
A Belgian employer will need to report and withhold taxes if a foreign related company grants remuneration to a Belgian employee.
Belgian authorities’ new position regarding social security contributions on foreign activities
21 September 2018
EU Regulation 883/2004 on the coordination of social security determines the applicable social security legislation in cross-border employment situations within the EEA and Switzerland. According to its general principle, employers and employees have to pay social security contributions in the work state. However, special rules exist for assignments and simultaneous activities.
For simultaneous activities, specific conflict rules in the EU Regulation determine the “competent country”, i.e. the country where contributions have to be paid. If Belgium is the competent country, employers have to take into account the Belgian social security authorities’ new position regarding the payment of social security contributions on foreign activities.
Update on transitional measures for the Dutch expat regime’s (30%-rule) shortening
19 September 2018
What follows is an update regarding the changes to the Dutch expat regime (30%-rule) following the Dutch Government’s 2019 Tax Plan, as previously covered by the 25 April 2018 and 4 June 2018 tax alerts.
As expected, the new Tax Plan proposal aims to shorten the maximum term of the 30% facility from eight to five years. No transitional measures are foreseen for expats currently benefiting from this tax regime (except for school fees, as elaborated upon below).
Consequently, an additional tax liability will apply to expats who have already benefitted from this regime for five years. In addition and depending on their personal situation, they can no longer be considered as non-resident taxpayer in box 2 and box 3 of the tax return.
The NSSO formally changes its position regarding “at charge of the employer” notion
11 September 2018
As outlined in the 31 July 2018 tax alert, the Belgian social security authorities are applying a stricter position on benefits granted by the parent company (typically equity related incentive schemes).
However, the Belgian National Social Security Office (NSSO – RSZ/ONSS) has formally changed its position regarding the “at charge of the employer” notion, more precisely on benefits granted by the parent company.
Indexation of Overseas Social Security contributions as of September 2018
6 September 2018
Under the Belgian voluntary Overseas Social Security Scheme (OSS), contributions have to be paid by the employer (or the employee) for individuals affiliated with the scheme, as part of their employment abroad.
Circular letter issued on mileage allowance for professional travel in Belgium
23 August 2018
Employers working in the private sector may rely on the lump-sum allowances granted by the Belgian government to its civil servants for professional travel. The lump-sum amount can be paid tax-free as a cost to the employer.
Flemish Region first to propose regional Work Permit regulation in Belgium
3 August 2018
Although the 6th State Reform of 2016 rendered the Belgian regions competent in the field of economic migration, the three regions (i.e. Brussels, Flanders, Wallonia) have until now agreed to apply the same requirements and conditons for the employment of non-EEA nationals.
On 13 July 2018, the Flemish region brought an end to this agreement and announced draft legislation with a specific set of conditions and processes to employ non-EEA nationals in Flanders. The proposals have been published in the “immigration vision document”.
Benefits in kind for mobile devices: administrative guidance on lump sum valuation rules
1 August 2018
The administrative circular letter of 24 May 2018 (2018/C/63) provides additional guidance regarding the determination of benefits in kind (BIK(s)) for mobile devices and internet/phone subscriptions made available by employers to their employees for private use (Dutch | French).
This tax alert focuses on the administrative guidelines. More background information can be found in the Individual tax alert of 30 October 2017.
Since the income tax and social security legislations are aligned on the topic, it can reasonably be expected that the guidance also applies for social security purposes (instructions from social security authorities; Royal Decree (Dutch | French) dated 7 February 2018 and published in the Belgian Official Journal of 27 February 2018).
Potential new tax reporting and withholding obligations with foreign equity plans
31 July 2018
Following on from previous coverage in the tax alerts of 18 September 2017 and 2 February 2018, which dealt with the increased tax and social security audits of foreign long-term incentive plans, the tax authorities are now contemplating the broadening of the tax reporting and withholding obligations’ scope for equity incentives.
Hiring a first employee: exemption from employer social security contributions
11 July 2018
When companies hire a first employee, they are often lost in the existing procedures and consequently miss certain opportunities.
For example, recent studies undertaken by the Federal Planning Bureau have shown that 30% of employers did not file a request for the employer social contributions exemption offered by the government for first hires.
This alert aims to remind companies in Belgium of this exemption’s availability for first employee hires.
Ground-breaking CJEU judgment on same-sex partner mobility
07 June 2018
On 5 June 2018, the European Court of Justice of the European Union (CJEU) rendered a ground-breaking judgment, stating that a “spouse” within the meaning of EU law on freedom of residence of EU-citizens and their family members includes same-sex spouses.
Update regarding duration of Dutch 30% ruling on existing cases
04 June 2018
The Individual tax alert of 25 April 2018 informed that the reduction of the term for the Dutch 30% ruling, from eight to five years, will also affect employees already benefitting from the regime.
On 25 May 2018, the State Secretary of Finance confirmed that such reduction for existing cases is - in its point of view - legally defendable.
Update on the Intra-Corporate Transfers Directive
25 May 2018
One of the currently key topics in EU corporate immigration is the EU Directive’s impact on Intra-Corporate Transfers (ICT Directive) regarding the entry and mobility of third country nationals in the EU. Deloitte has conducted a soon to be published study around this topic. What follows is an overview of some of the main features in said ICT study.
Stock options: No additional tax if additional cash benefit paid
18 May 2018
Employee stock options in Belgium are normally taxable upon grant and on a lump-sum percentage of the share value.
Such taxation upon grant requires a pre-financing of taxes and can create reluctance among employees in accepting the options, as they are not sure whether the value will sufficiently increase to ultimately recover at least the tax due upon grant.
Tax developments affecting real estate and professional income reporting
17 May 2018
With tax return season in full flow, this tax alert aims to outline important and useful information for tax resident income reporting.
Recent case law from European and Belgian courts underline the need to review the tax regime of real estate income in specific circumstances. This case law, which is outlined below, should affect how Belgian resident taxpayers report their income
- The Court of Justice of the European Union (CJEU) recently ruled that the difference in tax treatment between Belgian and foreign real estate (located in another Member state of the EU or the EEA) constitutes a forbidden restriction on the freedom of capital (Court case n° C-110/17 – (Dutch | French)).
- In Belgium, the Ghent court of appeal decided that the increased valuation of the benefit in kind for the provision of real estate by a legal person is discriminatory and cannot be applied. Hence, the lump sum benefit in kind must be calculated without applying the coefficient factors. A circular letter issued on 15 May 2018 confirms alignment with case law.
Tax claim procedure modified: Adjustments to administrative decisions possible outside court
16 May 2018
The Law of 15 April 2018, published in the Belgian Official Journal of 20 April 2018 (Dutch ǀ French), introduces the possibility for taxpayers to request adjustments to administrative decisions regarding tax claims (new article 375, §1/1 ITC).
This additional option is available to taxpayers with respect to decisions on tax claims issued as of 1 May 2018. It provides a simpler method of seeking favourable decisions on tax disputes, without bringing the case to court.
Employer gifts given at qualifying milestones: increased amounts
8 May 2018
Dutch 30% facility shortened to 5 years
25 April 2018
Change from 1 January 2019 applies to both new and existing cases
On 20 April 2018, the Dutch State Secretary for Finance presented the House of Representatives with the government’s response to the evaluation of the 30% facility. This tax alert outlines the government’s main conclusions.
Immigration formalities when employing foreign trainees and students
19 April 2018
With summer approaching, employers start to think about hiring foreign nationals for a traineeship or student job. This alert provides a summary of the immigration rules to be observed when hiring a foreign trainee or student.
Intra EU mobility and health care coverage
28 March 2018
When discussing the terms and modalities of an assignment package, health care coverage is always a clear attention point for an expat. Where most companies provide solid and full coverage health care insurances to their expats and family members, within intra EU assignments only limited use appears to be made of European rules allowing the transfer of legal medical coverage entitlements from the home country to the new host country. However, making use of these European transfer rules for medical care may allow an employer to manage the costs linked to an expat’s health care coverage significantly, without affecting the level of medical coverage provided.
Tax on securities accounts published
12 March 2018
The tax on securities accounts has been published in the Official Belgian Journal on 9 March 2018, and is effective from 10 March 2018 (Dutch | French). The entry into force date was adjusted during the legislative process, going from 1 January 2018, as previously foreseen in the first draft legislation of 11 December 2017, to an entry on the day after publication date.
National courts can disregard A1-forms with proven fraud
1 March 2018
Regulation 883/2004 determines the applicable social security legislation where secondment or simultaneous employment within the European Union is concerned.
An A1 form, issued by the competent social security authority (with applicable social security legislation), serves as proof to other administrations that the person is paying social security contributions in the competent country and is exempt in other countries.
Previously, the Court of Justice of the European Union (CJEU) repeatedly ruled that an A1 is binding and irrevocable in other countries, until it is withdrawn by the issuing administration (as result of an administrative cooperation procedure). Without such withdrawal, the host country’s authorities and courts cannot disregard the A1 form to apply their own social security legislation. This remains the case even if the form was issued based on incorrect facts. The Court’s decision in the “Altun case”, dealing with fraudulently obtained A1 forms, has clearly refined this case law.
Law implementing tax on securities accounts adopted by Parliament
16 February 2018
The Belgian Parliament adopted a new tax on securities accounts, which enters into force from 1 January 2018. This tax of 0.15% will be levied on a securities account holder if the deposited securities’ overall average value exceeds the EUR 500,000 threshold during a twelve-month period.
Are your equity plans still audit proof? Update on new developments
2 February 2018
The previous tax alert on this topic informed of an ongoing audit campaign by the Special Tax Inspection with Belgian employers. These audits aim to check employers’ reporting obligations of employees benefitting from incentives granted directly by foreign parent companies.
During the audits, it is clear that the inspection’s focus is to collect personal income taxes from these companies’ employees.
Following the Supreme Court’s October 2016 decision (also covered by previous tax alert on topic), the social security authorities have very recently confirmed that equity grants based on performance evaluations lodged by the Belgian employer in global HR ERP systems (e.g. Workday) are enough to trigger the Belgian social security scheme’s applicability.
Warrants limited to 20% of gross salary
1 February 2018
The term ‘disproportionate’ is interpreted as not exceeding 20% of total salary (11 January 2018 Individual tax alert).
Company bicycle and upcoming legislative changes
23 January 2018
Following the law of 22 October 2017, a Circular letter was published on 16 January 2018 (Dutch | French) confirming that a speed pedelec should be considered a company bicycle for income tax purposes (in line with the legislative changes dated 22 October 2017).
The Council of Ministers approved a draft Royal Decree on 14 December 2017 to align both the social security and tax treatment of a company bicycle.
Employee warrants: the Ruling Commission’s new position
11 January 2018
Many employers grant warrants or stock options on an equity based bevek/sicav to their employees. Most banks offering these products have a ruling that confirms these warrants or options as being within the scope of the option law (i.e. that they are only taxed upon grant and exempt from social security contributions).