When a company puts a house or an apartment at the disposal of one of its directors or employees, the beneficiary is taxed on a benefit in kind.
The calculation of the benefit in kind depends on whether the housing is provided by an individual (100/60 x indexed cadastral income) or by a company (100/60 x indexed cadastral income x 3,8 if the cadastral income is higher than EUR 745 – x 1,25 if the cadastral income is lower than or equal to EUR 745).
Both the Court of appeal of Ghent and Antwerp have ruled that the difference in valuation between a situation whereby housing provided by an individual and a situation whereby housing is provided by a company is unconstitutional and therefore not in line with the principle of equal treatment, as there is no objective and reasonable justification for the distinction.
It is anticipated that the Belgian tax legislation will change. However, for the time being, based on a practice note of 15 May 2018, the Belgian tax authorities seem to agree with the point of view of the above mentioned case law.
Indeed, the Belgian tax authorities now confirm that (in anticipation of a change in tax legislation) the benefit in kind for a housing provided by a company will be stipulated as follows: 100/60 x indexed cadastral income, without multiplying the result by 1,25 or by 3,8. In other words: in case of company provided housing, the Belgian tax authorities share the opinion that the (for the individual taxpayer) most favourable valuation formula, notably “as if” the housing is provided by an individual, is applicable. Please note that in case it concerns a furnished housing, the result will still need to be multiplied by 5/3 (= increased with 2/3).
We will keep you posted on the further developments in this area.