Context
On 31 July 2025, the Minister of Finance released a long-anticipated circular letter detailing significant updates to the partial wage withholding tax exemption for night and shift work. The introduction of the Bis Variant, coupled with recent case law, contributed to increased complexity, and varied interpretations of certain regulations, leading to uncertainty among applicants. This circular provides essential clarifications regarding the conditions, definitions, and calculation methods that companies must adhere to in order to leverage this incentive.
Key Highlights
1. General rules continue to apply
The application of the partial wage withholding tax exemption for night and shift work maintains adherence to specific rules.
- Employees must work at least one-third of their hours in shifts to qualify.
- A minimum shift premium of 2% must be provided to applicable employees.
- Shifts must involve consistent work in terms of content and magnitude.
- Overlaps and breaks between shifts should be limited to below one-fourth of the shift duration.
The circular does not change these rules, but clarifies some of these rules, and especially the interpretation thereof.
2. Allowance for 10% deviation and employer intentions
In an effort to bring legislation closer to reality, the Minister indicates that a 10% deviation in the content of the consecutive teams working in shifts will now be tolerated. This tolerance will be assessed daily per team within the shift structure.
When reviewing the correct application of the exemption, the Belgian Tax Authorities (BTA), will also consider the intention of the employer and potential impact of foreign factors to the shift work structure. Deviations arising from these situations will not be penalised, although clarity on how employers should document such deviations is still needed.
3. Clarification on tasks and ‘same work’ in terms of content and magnitude under night and shift work
The circular reiterates that shifts must perform the same work in both content and magnitude to qualify for the exemption, ensuring tasks for relevant employees remain consistent throughout the shift cycle.
4. Combination of ‘classic’ and Bis-variant’
The Bis variant was called to life in order to enable businesses to qualify even if the work performed by various shifts slightly varies, provided that the core activities remain aligned with overall business objectives. Until today, it was understood that this would be a temporary measure and that businesses should choose between the classic and Bis variant.
The circular indicates that both variants will be combinable within one company. Hence, it will be important to review the application of the exemption for all relevant teams. Teams that were out of scope for the classic regime can now be taken into consideration for the Bis variant without jeopardising the application of the classic variant for other teams.
In practice
These modifications are effective immediately, requiring companies to promptly adjust their practices. It is crucial for businesses to review their implementation of the partial wage withholding tax exemption and reassess the cost-benefit ratio of applying the Bis variant within their activities. An analysis of the relevant teams working in shifts and the applied exemption is essential. Corrections for exemption applications for the calendar year 2024 are still possible until 31 August 2025.
As previously noted, thorough documentation of the exemption application and any deviations is vital. In the event of a tax audit, the BTA will require a clear and comprehensive rationale for the exemptions applied.
For more insights on partial withholding tax exemptions, fiscal audits, and further assistance, please reach out to your regular PwC contact, Bart Van den Bussche, or Pierre Demoulin.
