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Individual Tax, Social Security and Immigration Alerts

News you can count on

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

On 4 May 2018, the Council of Ministers approved a draft Royal Decree updating gift amounts that can be given by employers to their employees at qualifying milestones; namely year-end holidays, honourable awards, retirement and marriage (Dutch | French).

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 Ruling Commission confirmed that bonuses paid in quoted warrants and options on BEVEKs/SICAVs to employees cannot be ‘disproportionate’ to salary (Dutch | French).

The term ‘disproportionate’ is interpreted as not exceeding 20% of total salary (11 January 2018 Individual tax alert).

Brexit: What do the negotiating directives and mandate mean for immigration?

30 January 2018

On 29 January 2018, the European Commission received its mandate to begin negotiations with the United Kingdom on transitional arrangements for Brexit. 

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).

Key immigration and social security topics for 2018

10 January 2018

A new year always brings along a number of legislative changes or developments. What follows is a high-level overview of several major changes and points of attention for 2018 in Belgium. 

What Bulgaria’s Presidency of the Council means

5 January 2018

The Council presidency rotates among EU Member States every six months. Bulgaria takes over the presidency from Estonia on January 1, 2018 and will in turn hand it over to Austria six months later.

The ICT Directive’s EU mobility impact for third country national Intra-Corporate transferees

7 December 2017

One of the most closely followed topics in EU corporate immigration is intra-corporate transfers to and mobility within the European Union. Deloitte is currently undertaking a study on this subject. What follows is an overview of the implementation status of the EU Intra-Corporate Transferees Directive (ICT directive), a year since the official transposition deadline. 

Stricter border control in the EU with the entry-exit system

23 November 2017

On 20 November 2017, the Council adopted regulations that will introduce an entry-exit system and will amend the Schengen border code accordingly.

This system will record information on entry, exit and refusal of entry for third country nationals crossing the external borders of the Schengen area.

Simplification of work permit renewal process

9 November 2017

The Flanders, Brussels and Wallonia regional authorities, competent for dealing with work permit application files, have abolished the requirement for a legalised information sheet.

This administrative decision, which is now applicable, will bring an important administrative simplification. The decision stems from the different regions now having full access to the foreigners register, which details foreign employees’ residence status.

Decrease of the taxable benefit-in- kind for mobile phone, PC, tablet and internet subscription

30 October 2017

During a press conference on 25 October 2017, the Minister of Finance announced the simplification of the lump sum valuation of IT related devices made available to employees or directors. The Minister indicated that the new simplified rules would be applicable from 1 January 2018.

Belgian Integration Rules Update

23 October 2017

Integration requirements for foreign nationals living in Belgium were recently clarified. Since 26 January 2017, a new condition for long stays in Belgium entered into force. The implementation of this residence condition means that third-country nationals applying for a long stay in Belgium must prove their willingness to integrate Belgian society.

Salary Indexation for Immigration purposes

19 October 2017

The Flemish immigration authorities recently communicated the new salary thresholds for foreign employees holding work permits, as either highly skilled employees or as executive employees, and for blue card holders. These salary thresholds are indexed annually based on the evolution of the price consumer index and apply as of 1 January 2018.

Will the Mobility Allowance or “Cash for Car” be a valid alternative to the company car?

18 October 2017

Deloitte report published

As covered by the 2 October 2017 Individual tax alert, the Council of Ministers approved the pre-draft bill with respect to the mobility allowance on 29 September 2017. The measure would allow employees to exchange their company cars for a cash amount (Dutch | French).

Updated daily lump sum allowances for business trips abroad

9 October 2017

The 15 September 2017 Ministerial Decree updates the daily lump sum allowance amounts (“per diem”) paid to civil servants for business trips abroad.

Mobility budget approved by Council of Ministers

2 October 2017

On 29 September 2017, the Council of Ministers approved the pre-draft bill with respect to the mobility budget on the basis of which an employee can exchange his/her company car for a cash amount (Dutch | French).

Are your equity plans still audit proof?

18 September 2017

The tax and social security authorities are increasingly scrutinising long-term incentive plans. The special tax inspection is focusing on non-declared foreign equity incentives and the social security inspection is very severe on benefits granted by a ‘third party’.

The nine takeaways from the State of the European Union

15 September 2017

The President of the European Commission, Jean-Claude Juncker, delivered his State of the European Union speech on 13 September 2017.

This text outlines nine standout points that may affect businesses.

Non-resident income tax return: deadlines published

14 September 2017

On 4 September 2017, the new form for the 2016 non-resident income tax return (assessment year 2017) was published.

Deloitte has been informed that Tax-on-Web for non-resident income tax return filing will be ready for use as of 14 September 2017.

Changes in lump-sum travel and lunch allowances for tax purposes

13 September 2017

The Royal Decree of 13 July 2017, which entered into force on 1 September 2017, introduces important changes regarding the lump-sum reimbursement of certain costs for civil servants of the Federal State. This may indirectly impact the acceptable amount of lump-sum allowance in the private sector.

Model Individual income tax return for Non-resident is published

06 September 2017

On 4 September 2017, the new form for the 2016 non-resident income tax return (assessment year 2017) was published in the Belgian Official Journal (Dutch preparatory document and filing form | French preparatory document and filing form).

Circular letter on lump sum allowance covering travel expenses

28 August 2017

Employers of the private sector may rely on lump sum allowances granted by the State to its civil servants for professional travel. The lump sum amount can be paid tax-free as a cost proper to the employer.

Summer Agreement – Tax measures relevant to individuals and employers

04 August 2017

On 26 July 2017, the Belgian federal government reached an agreement on a plethora of measures, the so-called “Summer Agreement”. The Summer Agreement includes a series of tax measures aimed at (i) stimulating economic growth and job creation, (ii) reinforcing Belgium’s attractiveness for foreign investments, and (iii) achieving more “fairness” in taxation policy.

In this alert, the focus is on the tax measures which are relevant to individuals and employers. For an overview of the corporate tax measures put forward by the agreement, reference is made to Deloitte’s Tax Reforms Hub.

These measures still need to be translated into a draft law and may be subject to amendments throughout the legislative process. Expectations are that the bill enacting the changes will be submitted to Parliament in autumn.

Belgium referred to ECJ for failing to implement Single Permit Directive

26 July 2017

On 13 July 2017, the European Commission decided to refer Belgium to the European Court of Justice in Luxembourg for failing to fully implement the Single Permit Directive. The Directive needed to be transposed into Belgian law by 25 December 2013. The Commission is also proposing a daily penalty of EUR 70,828.80.

End of double taxation on French-source dividends?

14 July 2017

The Belgian Supreme Court has put an end to the double taxation on French sourced dividends paid to Belgian tax residents through its recent decision of 16 June 2017. As a result, Belgian private investors will see the tax burden on their French-source dividends decrease from 40.5% to 27.5%.

What Estonia's Presidency of the Council means

11 July 2017

The Council presidency rotates among EU Member States every 6 months. On the week of 26 June 2017, Estonia takes over the presidency from Malta, and will in turn hand over to Bulgaria 6 months later.

Three consecutive Presidencies collectively agree on the areas that will be examined at European level. This ensures that important topics remain in focus over the course of 18 months. Estonia is the first of a new set of three Presidencies, with Bulgaria and Austria to follow (last 6 months of 2018).

Enhanced and stricter border checks for Europe

7 July 2017

Recent crises in Europe have underlined the need for stricter border checks and better border management. Consequently, the European Commission introduced a smart borders package, which includes several proposals. The most important ones are outlined below.

Update on OSS contributions and Limosa Declaration

8 June 2017

The OSS (Office for Overseas Social Security) announced an indexation of the contributions to be paid by the employer (or the employee) in view of an individual’s affiliation with the scheme, as part of his/her employment abroad. As OSS contributions are legally linked to the consumer price index, the OSS contributions are increased by 2% as of 1 June 2017. Both the contributions to the general scheme as well as to the additional schemes will increase. This should be taken into account when OSS payments are made for any employees affiliated with the scheme.

Stricter control on residency rights

2 June 2017

A recently published royal decree changes various residence regulations so that they can be applied more efficiently and rationally to prevent Identity and Domicile fraud. The most important changes are summarised.

FAQ on fuel card and other fuel costs published

1 June 2017

On 30 May 2017, the tax authorities published an FAQ regarding the new corporate tax rules for fuel card and other fuel costs (Dutch | French), introduced by the Program Law of 26 December 2016.

Effective 1 January 2017, the rules regarding the separate disallowed expense for company cars have been thoroughly modified.

Macron presidency: immigration, social security and Brexit

9 May 2017

After Brexit, Sunday 7 May 2017 proved to be another pivotal day for Europe. French citizens were to choose between the extreme right-wing candidate Marine Le Pen and the centre-left candidate Emmanuel Macron.

Le Pen had proposed a referendum to have France leave the European Union (“Frexit”), a complete immigration freeze and the re-establishment of France’s internal borders. Frexit and further disruptions on a European level were therefore a possibility, however, it was Macron who was elected.

Suspension of visa free travel for US and Canadian citizens?

8 May 2017

Currently, US and Canadian citizens can travel to the Schengen zone without a visa for up to 3 months in every 6 month period. EU citizens should equally be able to travel without a visa to the USA and Canada.

This is based on the EU’s common visa policy, whereby third country nationals can benefit from a visa waiver if all EU citizens can – reciprocally – travel without a visa to that country. The UK and Ireland are excluded from the EU’s common visa policy (as they have exercised their right to opt out) and are not affected by what follows.

Ruling Commission’s Board temporarily not operational

5 May 2017

As covered by the press on the morning of 5 May 2017, the Ruling Commission’s Board is not operational until further notice.

This is due to a decision by the Council of State dd. 28 April 2017 annulling the appointment of the three French-speaking Board members, Matthieu Bataille, Serge Riga and Véronique Tai. This decision was triggered by an appeal introduced by José Vilain, a former member of the Board. This decision does not affect the appointment of the 3 Dutch-speaking Board members, Steven Vanden Berghe, Guy Giroulle and Luc Saliën.

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