Social security and tax authorities on the same page
In accordance with Belgian legislation, social security contributions are due on any advantage in money or which can be expressed in money, granted by the employer to the employee as a counterpart for labour, and to which the employee is directly or indirectly entitled through his employment contract. However, payments made to the employee to cover costs incurred on behalf of the employer during the course of his employment are explicitly exempted, provided that it concerns the reimbursement of actual expenses attributable to the employer.
According to the fiscal circular of 11 May 2006 (Ci. RH. 241/534.514), daily lump-sum reimbursements made by the employer in respect of expenses incurred by an employee for short business trips abroad (i.e. business trips up to 30 days) could, under certain conditions and limits, be accepted as costs attributable to the employer. The social security authorities have in the past always accepted the approach as foreseen by the circular to exempt these daily lump-sum allowances from social security contributions.
In a recent circular of 10 October 2013 (Ci.RH.241/609.972), the tax authorities set out new rules regarding the tax-free daily allowances in the case of a work-related stay abroad, confirming that daily allowances for foreign business travel can also be granted to employees and company directors net of personal income taxes for foreign business trips of longer than 30 calendar days (up to a maximum of 24 months). The social security authorities have again confirmed that they will align their practices to this latest circular.
The employer can still choose whether to opt for the payment of a general lump sum of EUR 37.18 per day (irrespective of the destination of the trip) or for the amount figuring on the country list of the Ministry of Finance (amount depending on the country).
The allowances would cease to be paid in the event the employee or company director becomes permanently established abroad.