- 01 Sep 2017
Employers can grant employees who travel frequently an allowance to cover the expenses incurred during these journeys. The employer can choose to either cover the actual expenses or compensate such expenses on a fixed basis.
If the employer chooses to compensate expenses on a fixed basis, it is recommended to use the fixed amounts that are allocated to federal government civil servants for business trips within Belgium. As these fixed amounts are considered to be “reasonable criteria”, they are not taxed.
This principle remains in force, but the conditions and the set amounts change as from 1 September 2017.
Until 31 August 2017 four fixed bases were used (indexed amounts applicable as from 1 July 2017):
- EUR 3.98 for business trips of more than five hours per business day, yet less than eight hours per day;
- EUR 19.99 for business trips of more than eight hours per business day, or more than five hours per business day during which the 13th and 14th hour of the day are situated;
- EUR 23.97 per night for free accommodation (e.g., accommodation with family members, friends);
- EUR 45.54 per night for an overnight stay (e.g., hotel).
Thus, private sector employers can grant these fixed amounts to employees who make a similar domestic business trip within Belgium. The allowances based on these amounts are not taxed since they are based on “reasonable criteria”.
The Royal Decree of 13 July 2017 determining the allocations and allowances of federal civil servants modifies the current rules in a significant manner.
A federal civil servant will from now on only be entitled to an allowance for domestic business trips within Belgium if all of the following conditions are met:
- the domestic business trip takes at least six hours;
- the business trip occurs outside a 25 km radius;
- the trip should not lead to the granting of any other benefit or compensatory meal fee.
If these conditions are met, an amount of EUR 10 (indexed, as from 1 September 2017 EUR 16.73) can be granted tax free. The RD furthermore provides for the possibility to grant a monthly fixed expense allowance (limited to 16 times the amount of the fixed expense fee), without conditions with regard to the period and scale of the travel, if the type of job requires external performances on a regular basis.
As from 1 September 2017, a federal civil servant will only be entitled to a subsistence allowance if all of the following conditions are met:
- the accommodation is not free (the fixed amount of EUR 23.98 for free accommodation is discontinued);
- the business trip is more than 75 km;
- the federal service does not pay the expenses and the civil servant does not receive any other benefit for the accommodation.
If these conditions are met, an amount of EUR 75 (indexed, as from 1 September 2017 at EUR 125.51) can be granted tax free.
These fixed amounts will be considered as the expense allowances based on reasonable criteria as from 1 September 2017. This means that as a rule, private sector employers can apply these new fixed amounts with tax exemption if they want to meet expenses incurred by business trips in a fixed manner.
For the sake of completeness, we mention that also the fixed amounts determined by the National Social Security Office and the conditions mentioned in its “instructions” and which are not in line with the fixed amounts and conditions with regard to taxes, should be taken into account, (e.g., EUR 35 per night for the NSSO).
> Action point
Employers who allocate fixed allowances for business trips will have to use the new fixed amounts as from 1 September 2017.