Authors: Sophie Maes, Firm: Claeys & Engels
What should employers in Belgium have in mind from the start of 2020? This article sets out some key points.
In the absence of a new formal federal government (for now, the former government can only handle current affairs), predicting the future for Belgium is very difficult. However, the following are useful pointers for employers in Belgium.
No tax shift in 2020, only an indexation of tariffs
On 1 January 2020, there will be no shift in tax rates, but there will be an annual adjustment of tariffs and scales to take account of inflation (indexation). This means that the net salary will increase slightly.
Increased exemption from withholding tax on earned income for real estate work
The percentage increases from 6% in 2019 to 18% for remuneration paid from 1 January 2020. This percentage is applied to gross taxable remuneration excluding bonuses other than team bonuses; end-of-year bonus; holiday pay; salary arrears; pay in lieu of notice; replacement income; and remuneration obtained by a worker but paid or granted to his beneficiaries.
Increased 120% deduction for the use of company bicycles eliminated
However, the costs remain 100% deductible. This abolition comes into force on 1 January 2020 and applies from the 2021 tax year, covering the tax period beginning from 1 January 2020 at the earliest.
‘Secret commission contribution’ no longer deductible
Salaries, benefits of any kind and expenses are only deductible as professional expenses if they are justified by individual ‘281’ tax sheets. In order to strengthen compliance with this obligation and to be able to levy tax accurately, the tax authorities have a strong sanction, namely the ‘secret commission contribution’. The contribution itself is deductible for corporate income tax purposes. This situation will change from the 2021 tax year, for a taxable period starting at the earliest on 1 January 2020.
Compensation paid by foreign-related companies
Previously, as an employer, your active cooperation was not necessarily required when a payment or grant was made entirely without your intervention. However, from the 2019 income year onwards, these allowances must appear on a Belgian tax form and you must deduct a withholding tax.
Company cars: new rule from 1 January 2020
The private use of certain hybrid cars purchased or leased since 1 January 2018 will result in a more expensive benefit in kind from 1 January 2020. A specific flat-rate calculation has been introduced when the car is a ‘fake hybrid’.
Trainees: changes take effect from 1 January 2020
A Royal Decree defines who is responsible for underwriting insurance to cover work accidents for trainees from 1 January 2020. In principle it is the entity organising the internship that will be considered the employer for the insurance obligation. For a whole series of other occupations, however, it is the employer who employs the trainee who will be responsible for underwriting the insurance. This is particularly the case for:
- the individual vocational training contract organised by Bruxelles-Formation (PFIE), the VDAB (IBO) or in the German-speaking community;
- the training and integration contract organised by FOREM in Wallonia;
- the transition internship;
- the vocational adaptation contract for people with disabilities;
- the professional immersion agreement;
Transposition of the posting of workers directive
The Posted Workers Directive (Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services) needs to be transposed in Belgian legislation by 30 July 2020.
The Belgian data protection authority (DPA) has been more active in the past year and they have announced they will focus on SMEs in Belgium to boost knowledge of and enforce the GDPR rules for the year to come.