Belgium: Arrangements for cross-border workers extended into 2022 (COVID-19)

Agreements between Belgium and the neighboring countries of the Netherlands, France, Luxembourg, and Germany to prevent cross-border workers from being adversely affected financially by the coronavirus (COVID-19) pandemic were recently extended into 2022.

Because of travel restrictions imposed in response to the pandemic, cross-border workers faced a risk that their employment income would become fully taxable in the country of their residence. The agreements intend for cross-border workers not to suffer any tax disadvantages by working from home.

The agreements were initially effective in March 2020 and were extended several times through 31 December 2021.

The agreements have once again been extended through 31 March 2022. Moreover, Belgium’s agreements with the Netherlands, France, and Luxembourg are “tacitly extended” through 30 June 2022 unless one of the contracting countries decides to end the agreement prematurely.

Read a December 2021 report prepared by the KPMG member firm in Belgium

Certain employers can provide their employees with a “corona premium”—a tax-advantaged premium granted in the form of a consumption voucher for use in certain stores and establishments to support and contribute to the economic recovery. Employees can use these corona premiums until 31 December 2022.

The corona premium is not subject to employee social security contributions under certain conditions (for a maximum of €500 per employee).  However, it is subject to a special employer social security contribution of 16.5%. The premium is also exempt from individual income tax and is fully deductible for the employer.

Read a December 2021 report prepared by the KPMG member firm in Belgium