In practice, business expenses are often reimbursed via detailed expense reports that are substantiated by supporting documents. However, for certain expenses the Belgian tax authorities accept the payment of lump-sum allowances, if these are based upon objective and consistent criteria. According to Belgian tax law, the taxable basis of some benefits in kind is determined on a lump-sum basis for Belgian personal tax purposes.
We summarise below the important recent amendments from 2018.
Laptop, tablet, mobile phone and/or internet subscription
Many employers provide a laptop (PC), tablet, mobile phone and/or internet subscription to their employees, which they may also use for private purposes. This is considered a taxable benefit in kind for the beneficiary. Social security contributions are also due.
The valuation scheme of the benefit in kind has been modified to be more in line with the real value of the benefit. If an employee receives multiple benefits, the separate lump sum amounts for each device should be added together.
Some employers provide their employees with a smartphone with a mobile phone/internet data subscription and divide the expenses between the professional and the private part of the mobile phone and/or internet usage. In such circumstances, the phone will not be considered a taxable benefit in kind (not even for the use of the device itself), provided that certain conditions are met and that the bills are divided in a realistic way whereby the total cost above a certain limit is directly charged to the employee (i.e. the phone’s end-user).
Moreover, these lump sum valuations will also be applicable for social security contributions.
While the private use of petrol and electricity-powered company cars continues to be considered a benefit in kind, it has been slightly adapted for diesel (higher lump-sum) and hybrid cars.
Furthermore, if employees use their privately-owned car for business purposes, they can be reimbursed a lump-sum amount. The employer may reimburse employees for the costs they incur while using privately owned cars for business purposes, free of income tax and exempt from social security contributions. This reimbursement can also be made on a lump-sum basis.
Pursuant to a recent ruling of the tax authorities, employees may also receive a lump sum reimbursement for the use of a private garage to park a company car.
When the employee does not benefit from a company car but rather uses his or her own private car for professional purposes, a lump sum reimbursement for such use of a private car is permitted. The amount has been updated as from July 2018 (yearly update) and is EUR 0.3573 per km.
If a company (legal entity) provides housing to a director or employee, the beneficiary is considered to receive a benefit in kind. The calculation of this benefit in kind typically depends on whether the housing is provided by an individual (which is valued at a factor of 1) or by a company (whereby the value is multiplied by 3.8 in most cases).
The differing treatment (in putting a value of the benefit in kind varying when provided by a company or by an individual) has, however, been judged to be in violation of the principles of equality and non-discrimination. In order to avoid unjustified unequal treatment, the Belgian tax authorities have decided to no longer distinguish between housing provided by an individual and that provided by a company, and currently the lowest valuation at factor 1 is applied.
It is expected that Belgian tax law will be amended before the end of the current calendar year, with retroactive effect from 1 January 2018. The Ministry of Finance recently announced that all housing provided as a benefit in kind will be taxed at a factor of 2, whether it is provided by an individual or a company.
Revised indemnity amounts for mobility
An employee may be granted lump sum indemnities for mobility (national and/or international). These indemnities will not be considered part of the employee’s salary if certain conditions are met. The permitted amount of such indemnities is subject to indexation. New amounts are applicable as from 1 October 2018, due to indexation.