As from income year 2022, all amounts of costs proper to the employer will need to be reported on the annual individual salary forms 281.10 and 281.20. This change in reporting obligation will result in a broader transparency towards the Belgian tax authorities on the costs proper to the employer.
Previous requirements
The reimbursement of expenses incurred by the employee for the account of the employer (costs proper to the employer) is non-taxable for the individual and tax deductible as business expenses for the employer provided that the employer can demonstrate that the expenses are proper to his business activities and the payment is made to reimburse the employee who pre-financed these expenses.
Three different categories of costs proper to the employer can be distinguished:
- Expenses reimbursed based on supporting documents: no amounts should currently be reported, only a simplified statement is sufficient (‘yes – receipts);
- Lump-sum expenses reimbursed based on "reasonable criteria" (ernstige normen/normes sérieuses): no amounts should currently be reported, only a simplified statement is sufficient (‘yes – reasonable criteria);
- Expenses reimbursed not based on "reasonable criteria" (ernstige normen/normes sérieuses): amount should already be reported.
New requirements
According to article 57, 3° BITC, fixed allowances attributed to personnel members as reimbursement of costs proper to the employer must be reported.
In Circular 2021/C/20 on the homework allowances, the tax authorities announced that for all reimbursements of costs proper to the employer the total amount of the allowances must be reported on the annual salary forms as from income year 2022. In case an employer would for example reimburse the cost of the office chair, the actual cost of this reimbursement would need to be reported on the annual salary form as from 2022.
The Law of 27 June 2021 on various tax provisions, published in the Belgian Official Gazette of June 30, 2021, added art. 57, section 2 BITC according to which variable allowances attributed to personnel members as reimbursement of costs proper to the employer must be reported. According to the explanatory notes to the law, also company directors are covered.
Based on the above-mentioned Circular and the new legislation, all amounts of costs proper to the employer should now be reported on the annual individual tax forms 281.10 or 281.20 as from income year 2022. This means that all the amounts of the expenses reimbursed based on supporting documents (e.g. reimbursement for parking based on a parking ticket) and the amounts of the lump-sum expenses reimbursed based on "reasonable criteria” (e.g. daily allowances for foreign or Belgian business trips) should now also be reported on the annual salary forms.
Practical consequences and next steps
The amounts will only need to be reported on the annual individual salary forms applicable as of income year 2022 which need to be filed – most likely – by the end of February 2023. We expect that more practical details will be announced in the “Notice to employers and other debtors” (Bericht aan de werkgevers / Avis aux employeurs) which will be published in the beginning of 2023.
We however recommend employers to review their current processes already now as a lot of costs in scope are currently not reported through payroll but generally reported via expense reports submitted to the accounting department.
In case not all the costs are properly mentioned on the salary forms, this could result in the application of the secret commissions tax for corporate tax purposes (only in the case of fixed allowances) and in administrative penalties (in all cases).
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