Benefits granted by foreign companies: Reporting and withholding tax obligation – Update


Based on the current Belgian income tax legislation, there is no obligation to withhold, deduct and pay wage withholding taxes when benefits are granted by foreign (parent) companies to employees and/or company directors of Belgian (subsidiary) companies, provided the Belgian company does not intervene in the attribution of the benefits and provided no costs are re-charged to Belgium. This is about to change.

Last week, the parliamentary finance commission has approved the draft law introducing a reporting and wage withholding tax obligation in the hands of Belgian employers/companies, in case affiliated foreign companies grant taxable benefits to employees or company directors working for a Belgian company. Once adopted by the parliament in plenary session (which is expected to take place in the coming weeks), the Belgian employer will thus have the obligation to report any grant made by such foreign company to its employees/directors and from 2019 withhold and pay Belgian wage taxes on these grants. Taxable benefits that were granted in 2018, would already have to be reported on the 2018 salary statement (fiche 281.10 / 281.20), which needs to be submitted with the Belgian tax authorities by 1 March 2019 at the latest.

More information can be found in our headline of 26 July 2018.